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ACNielsen Global Consumer Confidence Index up slightly, India remains on top;
Consumers more positive about job prospects globally;
Perceptions of personal finances improve in Europe and North America;
Spending on entertainment increased worldwide.
19 January 2006
Hong Kong
Consumers’ confidence in their local economies, job prospects and personal finances is on the rise globally, according to a recent survey by ACNielsen, the world’s leading market research and information company. The ACNielsen Consumer Confidence Index, introduced by ACNielsen earlier this year, grew from the average 92 points in May 2005 up to 98 points in November, with two thirds of countries experiencing an increase
The world’s most optimistic consumers live in Asia-Pacific and North America. Indians remain the most confident, while the attitudes of the Portuguese have worsened further over the previous six months.
The ACNielsen survey, conducted in November 2005, polled over 23,500 respondents – regular Internet users – in 42 markets.
On job prospects and personal finances
The year 2005 certainly bolstered the outlook of American and Canadian consumers, with improved expectations of job security and availability and a more positive outlook on their personal finances. Sixty eight percent of North Americans look forward to good and excellent job prospects over the next 12 months, compared to 54 percent in May 2005 when they were asked the same question. Similarly, more North Americans think now is a good time to buy things they want and need, suggesting increased expectations of personal wealth.
And Europeans appear to be seeing a light at the end of the tunnel, with consumer confidence improving in half of the twenty countries in the region. Norway and Denmark have overtaken Ireland and now top the list of the most confident nations of the ‘Old World’. Their belief in better job prospects has also soared.
The Irish, who were Europe’s most confident in May, remain optimistic about jobs, but have become less certain about their personal finances and willingness to spend. Globally, the Irish seem to be the most committed to using their spare cash on paying off debts and loans – almost half of Irish respondents (49%) said they would use spare cash to pay off debts.
Positive developments were also seen in other European countries, in spite of prevailing economical and political conditions facing the region. Europe’s overall confidence index is three points below the global average. Perceptions of job prospects have substantially improved in Belgium, Netherlands, Sweden, Finland and Spain, although the first three remain among the Top 10 most pessimistic worldwide on this subject, together with France, Austria and Germany. In Italy, more people believe their well-being will improve and say it’s a good time to buy things. At the same time, 63 percent of Italians are negative in their outlook on jobs.
At the other end of the scale, Portugal has dropped down to the very bottom of the global consumer confidence index rating, its index declining by 6 points to 60 from May to November. The number of consumers expecting poor job prospects in Portugal increased from 22 percent to 36 percent, and Portugal is also among the Top 3 most pessimistic countries whose citizens don’t expect much from their personal financial situation and think now is a bad time to spend money.
Latin Americans are generally positive on employment and financial prospects, with 50 to 70 percent of respondents in the four countries expecting to see improvements in the months ahead. Consumer confidence index has increased in all markets in Latam, but remains below the global average in Brazil.
Consumers in Asia-Pacific continue to ride a wave of economic development, with their confidence index increasing in nine out of 13 markets. Indians have made an even bigger leap of faith and remains at the top of the global list with a confidence index at 132 points – nine points ahead of the world’s second ‘most optimistic’ nation, New Zealand. The number of Internet users in India who think job prospects in the country will be not just good, but excellent, doubled from May to November 2005, to 34%.
Even the Japanese and South Koreans, with the lowest confidence indices globally, have improved their forecasts of the future. In Japan, 45 percent more people believe in better job prospects over the next year, compared to the number in May 2005. Although only up to one fourth of respondents in Japan and South Korea lay positive hopes on the future state of their personal finances, opinions have increased that now is a good time to buy things they want and need. Marketers of consumer goods and services, however, shouldn’t expect too much here, for the study shows that Asians are the world’s biggest savers, with 52 percent putting spare money away for a rainy day.
The world is focused on savings
In spite of the general growth of consumer confidence and the number of people who believe in a positive financial future for themselves over the next year (driven mostly by Europe and North America), people are still cautious about spending money. The number of consumers optimistic about their financial situation grew from May to November, but so did the number of those who consider the present time NOT good for buying things they want and need, especially in Europe and North America.
Globally, 59 percent of consumers share positive financial expectations, while 61 percent say they would rather not spend money. In addition, more people globally prefer to put their spare money into savings – 40 percent in November vs 36 percent in May.
People spent more on entertainment in summer
Asking consumers what they do with any money left after covering essential living expenses, the northern equator summer season has clearly left its footprint on spending pattern. Out of home entertainment, new clothes and holidays came out on top of the global list after savings, leaving the practicalities of paying off debts and loans for the northern winter. This trend was mostly driven by European countries.
Europeans remain true to form of neglecting savings, which came fifth (34%) on the priority list after out of home entertainment (38%), clothes (38%), holidays (36%) and home improvements and decorating (35%). When it comes to the last two items, Europeans are the world’s biggest spenders. However, everything changes with time –in May’05, eight out of ten countries spent most on home improvements hailed from Europe, now they are only seven.
It is also interesting to note that in the fashion arena, France has lost its title of the second biggest spender on new apparel, handing it to Spaniards (48%) and Italians (47%). Russians firmly hold leadership, though, with 70 percent of consumers emptying clothes stores!
Asians, Australians and New Zealanders, on the contrary, are mostly focused on savings and paying off debt – the global Top 10 for savings featured Asian countries only. However, holidays came second on the list, with 35 percent of Asia-Pacific Internet users giving their spare cash for relaxation and travelling.
Citizens of the US, Canada and South Africa continued spending mostly on paying down debt, while at the same time keeping themselves entertained out of home. But second to none in out of home entertainment are Latin Americans. Mexico, Argentina, Brazil and Chile all featured among the Top 10 countries with the number of people spending money on entertainment. Mexico is number one globally (56%), closely followed by another hot blooded nation, the Spanish (55%). Interestingly, Spain was the leader in May 2005, while Latin countries did not show in the Top 10 at all!
Nearly one fourth of Portuguese and US consumers continue to say that they have no money to spend after covering essential expenses. The percent of people saying so declined significantly in the US, and in Brazil (most prominently, from 23% down to 7%), Chile, Denmark, Sweden, Greece, Italy, Australia, New Zealand and South Korea.
Major fears and concerns
Globally, consumers continue to rank their major concerns as the economy, job security and health.
The economy is the biggest concern for most of Asian countries, as well as the US, while job security is the top issue for Latin Americans. Health is the biggest or second biggest concern in Europe and North America with their ageing population. Polish consumers are worried over political stability, following the recent change of the country president.
Crime is by far the biggest concern in South Africa, followed by job security and the economy.
The ACNielsen Online Consumer Confidence Survey, the largest twice-yearly global survey of its kind, is aimed to gauge consumers’ current confidence levels, spending habits/intentions and current major concerns. The most recent wave of the survey took place last month (November 2005) and polled over 23,500 consumers – regular Internet users – in 42 markets in Europe, North and Latin America, Asia-Pacific region, Africa (Republic of South Africa) and the Middle East (UAE).
About ACNielsen
ACNielsen, a VNU business, is the world's leading marketing information provider. Offering services in more than 100 countries, the unit provides measurement and analysis of marketplace dynamics and consumer attitudes and behavior. Clients rely on ACNielsen's market research, proprietary products, analytical tools and professional service to understand competitive performance, to uncover new opportunities and to raise the profitability of their marketing and sales campaigns. To learn more, visit www.acnielsen.com
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