Consumer confidence grows around the world

07 May 2010

NEW YORK: Consumer confidence around the world has almost returned to the level recorded prior to the recession, according to The Nielsen Company.

The research firm surveyed 27,000 people across the globe in an effort to gauge their views about the economic outlook and likely spending habits over the next six months.

Overall, the barometer of popular perceptions reached 92 points, below the long-term average of 100 points but just two points shy of the figure of 94 points registered in the same report in October 2009.

Moreover, this total had climbed from the all-time low of 77 points posted early last year, when the financial crisis was at its peak.

A third of respondents also revealed they were planning to boost their expenditure on out-of-home entertainment, apparel and technology products in the period covered by the forecast.

"[This is] a sign manufacturers and retailers have been eagerly waiting for that consumer spending intentions are turning into actual spending reality," Dr Venkatesh Bala, chief economist of The Cambridge Group, said.

However, in many areas an emphasis on value, own-label and promotions is likely to continue to be a major factor, according to Nielsen's estimates.

Confidence improved in 41 of the 55 countries assessed, climbing to 127 points in India, 116 points in Indonesia and 115 points in Norway, which have been among the more positive markets during the crisis.

Taiwan actually produced the biggest uptick, of 14 points, compared with the previous study, with Singapore up by 11 points, Israel and Mexico by ten points and Colombia by nine points.

Conditions remained rather mixed in the US, which delivered a rating of 85 points, up by just one point from six months ago and by two points on the first quarter of 2008.

"Americans are still extremely cautious about spending given the uncertain nature of the recovery … and the continued level of high unemployment," said James Russo, vp, global consumer insights at Nielsen.

"A huge opportunity exists for manufacturers, marketers and retailers who know how to reach the right consumers in the most effective way."

Elsewhere, scores in Asia Pacific as a whole jumped by eight points, with China experiencing a leap of six points to 108 points, equalling its previous best.

"Asia's rapid recovery and bright prospects makes this booming region a high priority for resource allocation for manufacturers and retailers, including tapping into the large and growing number of middle-class consumers," said Bala.

In Latin America, Brazil was the most optimistic nation on 108 points, with Colombia on 100 points, Chile on 99 points and Argentina on 91 points.

Nielsen suggested that while many shoppers in this region had cut back their outlay on discretionary purchases in the downturn, the FMCG industry is now "gradually recovering".

Europe generated a more modest increase of two points, and while just seven of the 28 nations in the region seeing a decline, this group included both Germany and Italy.

Some 84% of contributors in the UK also believed the country was still in recession, but this was down from 94% six months ago, and improving views have "positively stimulated volume growth in FMCG sales".

Bala argued that in both the US and Europe, firms in this sector should seek to focus on a “high degree of precision in targeting, value propositions and pricing".

Data sourced from The Nielsen Company; additional content by Warc staff