In the latest round of the survey, conducted between 10-27 February 2012, overall confidence rose in 68% of global markets measured, compared to Q4 2011 where confidence increased in 21% of global markets. Confidence in Q1 2012 increased in 38 out of 56 markets, fell in 16 markets and remained flat in two.
"Households around the globe experienced brighter personal situations in terms of jobs and personal finances last quarter, especially in the US and Asia, which was reflected with improved consumer confidence and higher discretionary spending," said Dr. Venkatesh Bala, chief economist at The Cambridge Group, a part of Nielsen. "While global economic conditions are more stable than in the depths of the European sovereign debt crisis late last year, underlying economic conditions are still fragile and fluid in many parts of the world, which could affect consumer confidence and spending momentum for the coming quarter."
In the US, consumer confidence rose nine points to 92, its highest level since before the recession while China's consumer confidence increased two points to 110, its highest level since the inception of Nielsen's index in 2005.
"Major economic indicators in China are still at reasonable levels, while the global economic condition is complicated," said Yan Xuan, president, Nielsen Greater China. "The government's firm support for small and medium-sized enterprises through the expansion of credit, a policy shift to create domestic consumption and demand, and the continued enforcement of restrictions designed to deflate the real estate bubble are all contributing to Chinese consumers' optimism."
The Nielsen Global Survey of Consumer Confidence and Spending Intentions, established in 2005, tracks consumer confidence, major concerns and spending intentions among more than 28 000 Internet consumers in 56 countries. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism.
In Nielsen's survey, while more than half (57%) of consumers around the world indicated they were in a recession, that sentiment was down from 64% last quarter. Regionally, online respondents who believed they were in a recession was on the decline in Asia -Pacific (44% compared to 53% previous quarter), North America (80% compared to 86% previous quarter) and Europe (72% compared to 74% previous quarter) while a slightly growing number of online respondents in Latin America (48% compared to 47% previous quarter) and Middle East/Africa (75% compared to 74% previous quarter) believed they were in a recession.
More than half (55%) of global online consumers described their personal finances for the next 12 months as excellent/good, up from 52% in Q4 2011, while one-third (33%) indicated it was a good time to buy the things they want and need. Local job prospects improved globally by 6 percentage points in Q1, yet less than half (48%) perceived the outlook for the upcoming year as favourable.
Intended discretionary spending and saving increased in Q1 across all sectors reviewed. Half of consumers around the world plan to put spare cash into savings, up from 48% in Q4 2011. Some 34% intend to buy new clothes, up from 31% the previous quarter and 33% expect to spend spare cash on holidays and vacations - a rise of 7 percentage points from Q4 2011. Planned spending on technology also increased, with 28% of global online consumers intending a purchase, up from 22% the previous quarter.
"Improved confidence led to more discretionary spending from consumers around the world," said Dr. Bala. "The survey evidence suggests that while consumers are neither as confident nor comfortable with the economy as they would like to be, they are expressing a pent-up demand to spend as they did prior to the recession. Such a desire for psychological release through the various forms of discretionary consumption reported in the Nielsen survey - all of which act as stress-relievers - is understandable after three years of relentless belt-tightening and uncertainty."
Consumer concern for the economy remained a top worry among one-in-five global respondents (19%) - up from 18% in Q4 2011. Job security (15%), work/life balance (10%), health (8%), and increasing food prices (7%) were other key concerns.
Consumer confidence rose in all global regions, with North America posting the biggest regional gain, up eight index points to 92. Asia-Pacific posted an index of 103, up four points, and the Middle East/Africa rose two points to 97. Confidence in Europe rose one point to 72 and Latin America remained flat at 98 index points.
The biggest quarterly confidence gains last quarter came from Taiwan (+13), Chile (+11) the United States (+9), Venezuela (+9), Malaysia (+6), Denmark (+6), Estonia (+6), Saudi Arabia (+6), United Kingdom (+6), and Peru (+6).
"The jump in US confidence is not entirely surprising given respectable job gains in the past quarter," said James Russo, vice president, Global Consumer Insights, Nielsen. "However, this is not yet a rising tide raising all ships as the US was dealt a below expectations March job report, followed by a spike in new unemployment claims in April. Furthermore, according to Nielsen's analysis, consumer households earning over US$100 000 continue to generate gains in consumer spending and shopping trips, while nearly 50% of Americans in the lower income brackets struggle. The near-term outlook for the American consumer will be heavily impacted on how the labour market behaves, especially for middle-class and lower income consumers."
India remained the world's most optimistic market for the ninth consecutive quarter with a one point consumer confidence increase to 123, followed by Saudi Arabia (119), Indonesia (118) and the Philippines (118). Hungary was the world's most pessimistic market at 32 index points, followed by Greece (37) and Portugal (39).
"India once again topped the global index indicating a high level of confidence amongst consumers, who are optimistic yet cautious," said Justin Sargent, managing director, Nielsen India. "This optimism is reflected in Indian consumers' increased confidence in job prospects, which is a good sign for the economy. However, job security is still a cause for concern and consumers are still cautious when it comes to spending spare cash. Similar to previous consecutive quarters, saving cash is still a priority for Indians. On the other hand, the personal digital revolution and experimentation by consumers who are now spoiled with affordable choices, is driving the increase in intention to spend on technology. Along with this, a growing affinity for branded apparel and organised retailing is likely to attract a growing proportion of discretionary spending despite economic volatility in the near term."
"Greek consumer confidence has reached an all-time low, as Greek consumers remained pessimistic for the future of the Greek economy," said Vicky Grigoriadou, client service director, Nielsen Greece. "The Greek fiscal crisis has been looming for some time, but there have been no signs of recovery. Consumers continue to doubt that Greece will manage to escape the recession any time soon and expectations for economic growth seem to have vanished."
The biggest quarterly declines came from Australia (-8), Poland (-8), Sweden (-7), Belgium (-7) and France (-5).
"Australian consumer sentiment has dropped back to levels seen in the first half of 2009 when the global financial crisis hit households hard," said Chris Percy, managing director, Nielsen Pacific. "With economists predicting further interest rate cuts at the start of 2012, consumers were disappointed when these failed to materialise and to make matters even worse, the major banks raised their home loan interest rates, putting further pressure on households. Australians' growing concerns over the nation's economy, coupled with the high dollar and rising unemployment, continue to influence consumer behaviour and soften sentiment."
The Nielsen Global Survey of Consumer Confidence and Spending Intentions was conducted between 10-27 February 2012 and polled more than 28 000 online consumers in 56 countries throughout Asia-Pacific, Europe, Latin America, the Middle East, Africa and North America. The sample has quotas based on age and sex for each country based on their Internet users, and is weighted to be representative of Internet consumers and has a maximum margin of error of ±0.6%. This Nielsen survey is based on the behaviour of respondents with online access only. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60% Internet penetration or 10M online population for survey inclusion. The Nielsen Global Survey was established in 2005.
The Nielsen Company is a global information and media company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and business publications. For more information, go to www.nielsen.com.
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