INTERNATIONAL. Rising oil prices, the spread of the sub-prime credit issue in international markets, and the slow down in the US economy are all taking their toll on the confidence of the world’s consumers. That’s according to the latest Global Consumer Confidence Study conducted by The Nielsen Company.
More than a quarter of global consumers expect a global recession in 2008, resulting in a dip in confidence in 21 of the 48 markets Nielsen surveyed.
Thailand, Taiwan and Italy lead the pack with a majority anticipating a global recession in the next 12 months. Globally, over 50% of people are concerned that a recession will lead to unemployment and inflation. At the other end of the scale, 40% of the world’s consumers do not believe there will be a global recession next year. Confidence is highest in two of the fastest developing countries – China (69%) and Vietnam (66%).
“Despite rising international concerns about a slowdown in developed markets, Chinese consumers are clearly confident that China’s robust growth won’t let them down in 2008,” said Kenneth Lee, Executive Director, Customized Research, The Nielsen Company.
The Nielsen Consumer Confidence Index
Established in 2005, the Nielsen Global Consumer Confidence Index shows a continuing decline in global consumer confidence, with an Index of 94 in the second half of 2007, down from 97 in May 2007, and 99 in the same period of 2006.
Globally, Norway superseded India as the world’s most optimistic market with a CI score of 135. India ranked second at 133. Scoring 124 this time round, Denmark ranked a distant third, a position it has maintained for the past three rounds of the survey.
In addition to India, Asia Pacific markets including Indonesia, Australia, Hong Kong, Vietnam, New Zealand and Singapore were all among the world’s top ten most optimistic, with Indonesia, Australia and Singapore in particular registering an increase in consumer confidence levels – making Asia Pacific the most optimistic region worldwide.
Though Chinese consumers don’t believe global markets will fall prey to a recession, overall consumer confidence has dipped eight points to 98, indicating consumers are not complacent about the prospects of a boom. In the event of a local economic slowdown, Chinese consumers would be most concerned about inflation (67%), unemployment (52%) and falling property prices (27%).
Of those Chinese who felt they had money to spare, 57% were investing in the future – buying stocks and mutual funds. Hong Kong and Taiwan were also top investors in the region with 58% and 50% respectively buying up stocks. Some 40% considered spending their spare cash on holidays and new clothes (each 39%). Only 4% of Chinese said they had no spare cash, well below the global and Asia Pacific averages of 13% and 7% respectively.
Across Asia Pacific, South Koreans, Taiwanese and Japanese are among the most cautious about discretionary spending, with around eight in ten thinking now isn’t a good time to buy the things they want, in stark contrast to Hong Kong and India, where over 60% are optimistic about spending in the next 12 months.
“Consumers around the world are cautious about spending – of the 48 markets surveyed, 26 recorded a continuing decline in their readiness to spend compared to six months ago,” said Lee. “Chinese retailers have less to fear while retail figures remain strong and in light of rising disposable incomes among Chinese consumers.”
The Survey
The latest survey, conducted from October to November, polled about 26,312 Internet users in 48 markets from Europe, Asia Pacific, North America and the Middle East.
The Nielsen Online Consumer Confidence and Opinion Survey is the largest half-yearly survey of its kind, aimed at gauging current confidence levels, spending habits/intentions and current major concerns of consumers across the globe. The Nielsen Consumer Confidence Index is developed based on consumer’s confidence in the job market, status of their personal finance and their readiness to spend.
About The Nielsen Company
The Nielsen Company is a global information and media company with leading market positions in marketing information (ACNielsen), media information (Nielsen Media Research), online intelligence (NetRatings and BuzzMetrics), mobile measurement, trade shows and business publications (Billboard, The Hollywood Reporter, Adweek). The privately held company is active in more than 100 countries, with headquarters in Haarlem, the Netherlands, and New York, USA. For more information, please visit www.nielsen.com
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