With many economists reporting that the worst of the global economic crisis appears to be past, consumers around the world are expressing more confidence about their personal financial situations according to the most recent Nielsen Global Consumer Confidence Index, which jumped 9 points from 77 index points in April to 86 in October. Brazil, Hong Kong and South Korea recorded double-digit boosts in confidence, while the U.S. recorded its first increase in consumer confidence since early 2007. But even though most consumers are feeling better about the economy, they remain cautious about spending their money.
Sentiment = Sales
“A nine-point surge in consumer confidence signifies a welcome return to positive territory. It really demonstrates that in the last six months, a majority of consumer sentiment across the globe has shifted gears from recession to recovery — the tide has turned,” said James Russo, Vice President, Global Consumer Insights at The Nielsen Company. “In this economic climate, sentiment is closely correlated to actual sales. For example, in Australia, consumer confidence was up 11 points in the third quarter, and strong economic conditions prompted the Reserve Bank of Australia to raise rates, becoming the first G20 country to do so. Correspondingly, we have seen sales increase 2 percent in each of the last two months in defined fast moving consumer goods (FMCG) categories while online sentiment (buzz) regarding the recession is at the lowest levels since we began tracking that dynamic in January 2009.”
Read additional insights on global spending trends in the Nielsen Economic Current
Majority of countries show gains
Consumer confidence rose in 45 out of the 52 countries compared to six months ago (Ukraine and Saudi Arabia were added in the latest round of the survey). In April, the Index hit its lowest point of 77 index points, but as massive stimulus plans began to take effect around the world during the second quarter, consumer confidence slowly began to recover.
- Consumers in India, Indonesia and Norway topped the confidence index, while the most pessimistic consumers were in Latvia and Japan.
- Hong Kong posted the largest consumer confidence increase in the third quarter compared to Q2, up 14 points from 79 to 93 index points, followed by South Korea (+13 points) and Brazil (+12 points).
- Among other BRIC nations, consumer confidence rose 8 points in India, 6 points in China and 4 points in Russia compared to the previous quarter.
- Consumer confidence fell in only two countries in the third quarter: Spain (-4) and Japan (-2).
- Australia and New Zealand also posted double-digit increases during the last quarter, while Europe’s two largest economies, France and Germany, posted the highest increases in the Eurozone, up 7 and 5 points, respectively.
Nielsen’s global consumer confidence in October rebounded to almost the same level as the first half of 2008 before the very worst of the financial crisis hit global markets. “The survey shows how much the pace of economic recovery has accelerated in the last six months, especially in Brazil and some Asian markets,” said Russo. “Nielsen consumer, retail and media data also shows a trend of consumers shifting gears from recessionary into recovery mode.”
The Nielsen Global Consumer Confidence Index tracks consumer confidence, major concerns and spending habits among more than 30,500 Internet users in 54 countries. The latest round of the survey was conducted between 28 September and 16 October 2009.