- Optimism increases over job prospects, personal finances, and consumption timing
Consumers around the world “put spare cash into saving first and then spend it on clothes,
holidays and vacations”
The biggest concern of consumers around the world is “economy” followed by “job security” and “work/life balance”
According to The Nielsen Global Survey of Consumer Confidence and Spending Intentions conducted between February 10 and February 27, 2012, overall confidence rose in 68 percent of global markets measured, compared to Q4 2011 where confidence increased in 21 percent of global markets. Confidence in Q1 2012 increased in 38 out of 56 markets, fell in 16 markets and remained flat in two. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism.
Asia-Pacific Posted the Largest Consumer Confidence for the Fourth Consecutive Quarter
India Recorded the Largest Consumer Confidence for the Ninth Consecutive Quarter
Regionally, confidence increased in all the regions except South America compared to last quarter. Asia-Pacific (103) was the most optimistic market for the fourth consecutive quarter and North America (92) posted the biggest gain, up eight index points
Nationally, India remained the world’s most optimistic market with the largest consumer confidence for the ninth consecutive quarter followed by Saudi Arabia (119), Indonesia (118) and the Philippines (118). Hungary (32) recorded the lowest consumer confidence in Q1 this year followed by Greece (37) and Portugal (39).
South Korea (49) was ranked 51th among 56 countries, remaining one of the world’s most pessimistic markets. However, confidence recovered, up three index points compared to last quarter.
The biggest quarterly confidence gains last quarter came from Taiwan (+13), Chile (+11) the United States (+9), Venezuela (+9), etc whereas the biggest quarterly declines came from Australia (-8), Poland (-8), Sweden (-7), Belgium (-7), France (-5) and so on.
“Households around the globe experienced brighter personal situations in terms of jobs and personal finances last quarter, especially in the U.S. and Asia, which was reflected with improved consumer confidence and higher discretionary spending,” said Dr. Venkatesh Bala, chief economist at The Cambridge Group, a part of Nielsen. “While global economic conditions are more stable than in the depths of the European sovereign debt crisis late last year, underlying economic conditions are still fragile and fluid in many parts of the world, which could affect consumer confidence and spending momentum for the coming quarter.”
More than Half (57%) of Consumers Responded They Are in a Recession, Down from Q4 2011 (-7%p)
In Nielsen’s survey, while more than half (57%) of consumers around the world responded they were in a recession, that sentiment was down by seven percent from last quarter (64%). While a slightly growing number of respondents in Latin America (+1%p) and Middle East/Africa (+1%p) believed they were in a recession, the number of such respondents was on the decline in Asia -Pacific (-9%p), North America (-6%p) and Europe (-2%p). In Korea, 87% of the respondents said they were in a recession, which was increased by 1% from last quarter.
Optimistic Increased Over Job Prospects, Personal Finances, and Consumption Timing
Consumers around the world cited improved job prospects, personal finances, and consumption timing. One of three consumers around the world (33%) responded it was a good time to purchase things and one of two consumers (48%) was optimistic about local job prospects. In addition, more than half (55%0 of consumers worldwide perceived their personal finances for the next 12 months as favourable. All of those responses were slightly increased from last quarter, which indicates consumer sentiment and economic prospect are improving.
“Put Spare Cash into Saving First and Then Spend It on Clothes, Holidays and Vacations”
With regard to the question how they would spend spare cash, half of consumers around the world responded they would put spare cash into savings. Many respondents also said they would spend spare money on clothes (34%), holidays and vacations (33%) and entertainment outside home (32%).
In Korea, most of the Korean consumers responded they would save spare cash (57%) followed by clothes (23%), holidays and vacations (21%) and debt/credit card/load repayment (20%) (see Table 1).
The Biggest Concern of Consumers Around the World is “Economy” Followed by “Job Security” and “Work/Life Balance”
Koreans Are Also Worried about “Children Education” and “Debt”
Consumer concern for economy (19%) remained a top worry followed by job security (15%) and work/life balance (10%). While consumers around the world and in Asia-Pacific responded their key concerns were health, increasing food prices and patients’ wellbeing and happiness, Korean consumers said they were mostly worried about children’s education and wellbeing (11%) and debt (10%).
Korean Consumers (64%) “Reduced Eating-Out Expenses to Cut Household Expenses” while Consumers Worldwide Reduced Clothing Expenses
The survey indicated 67 percent of consumers around the world and 72 percent of Korean consumers changed their consumption behavior to cut household expenses. Interestingly, Korean consumers reduced eating-out expenses (64%) and clothing expenses (53%) and buy cheaper brand food (50%), cutting costs of the necessities of life the most. In contrast, the largest percentage of the consumers around the world (51%) said they recoded clothing expenses (51%) followed by entertainment outside home (47%), gas and electricity (47%), eating-out expenses (39%), holding off upgrading electronic devices such as PCs and mobile phones.
Eun-Hee Shin, managing director of Nielsen Korea, analyzed such phenomena by saying “this survey result indicates Korean consumers are more optimistic about job prospects, personal finances and consumption timing. Korean consumers’ sentiment over the economy is gradually stabilizing as the Korea’s consumer price index grow has slowed down. However, we need to be cautious on speed of economic recovery because uncertainties still exist such as high oil prices, increase in public utility charges, household debt and financial/real estate market.