NEW YORK: Global consumer confidence dropped to an 18-month low during the second quarter of 2011 with many shoppers trapped in a "recessionary mindset", a Nielsen report has shown.
According to the research firm's latest Quarterly Global Online Consumer Confidence Survey, 58% of global online consumers believe they are still living in a recession. More than half of respondents anticipate still being in a recession in a year's time.
Dr Venkatesh Bala, chief economist at Nielsen's Cambridge Group, said: "There wasn't enough positive news to inspire confidence among global online consumers in the second quarter.
"Hopes for full global recovery in the next 12 months substantially weakened in Q2 as the majority of consumers around the world remained in a recessionary mindset."
The Nielsen survey also showed that consumers anticipate returning to a more cautious approach in all aspects of their purchasing including the booking of holidays, clothes buying and technology upgrades.
In the US, 31% of consumers have no spare cash for discretionary spending. Confidence in the world's largest economy dropped to 78, lower than the 80 points registered during the worst of the global economic downturn in 2009.
Todd Hale, senior vice-president at Nielsen in the US, blamed declining confidence in the region on "rapidly rising gas prices, inflationary pressures at check-out, continued woes in the housing market with home foreclosures and declining property values, unsettling weather patterns creating flooding and tornado damage, and a stagnant job market".
Meanwhile, 25% of Middle Eastern/African consumers and 22% of Europeans told Nielsen they had no surplus cash for casual spending. Increasing inflation and the rising cost of energy became the biggest concerns in Europe during the second quarter.
Greece scored lowest in the confidence stakes globally. But confidence improved in France and the UK during the second quarter.
The Arab Spring significantly boosted consumer confidence in Egypt and Saudi Arabia during the first quarter of 2011. But these large increases have been dramatically corrected in the second quarter following a period of growing political uncertainty and rising prices.
In spite of rising inflation, consumers in Asia remained generally the most optimistic. Indian consumers retained their position as having the most positive mindset of all the countries polled.
In Latin America, consumer confidence increased marginally by one index point to 91.
"Weak economic figures, slowing manufacturing performance and inflation in Asia, an intensifying debt crisis in Europe and continuing political instability in the Middle East combined with rising household expenses in the US have taken their toll on consumers' fragile confidence," Dr Bala concluded.
Data sourced from Nielsen and msnbc; additional content by Warc staff