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20 August 2008
Singapore
Over half of global online consumers think their country is currently in recession and consumer confidence worldwide has fallen to its lowest since 2005, according to the Nielsen Global Consumer Confidence Index, which measures the confidence, major concerns and spendinghabits of online consumers in 51 markets around the world.
The latest Nielsen Consumer Confidence Index dropped to 88 - down six points in the last six months – the largest single drop the Index has recorded in the last three years.
“Consumer confidence fell in 39 out of 48 countries in the past six months, with New Zealand, USA and Latvia suffering the deepest declines,” said Vicky Santos, Executive Director for The Nielsen Company, Singapore. “Among the 39 markets recording a drop in consumer confidence, 15 fell by double-digits, including Singapore, which saw a 12-point decline.”
“Since the inception of Nielsen’s half-yearly Consumer Confidence Index in 2005, Singaporeans’ confidence levels have been on a steady rise until the latest survey. This is the first time we are seeing a decline—and at an index of 102, this is by far the lowest recorded level here,” Ms Santos added.
“The last six months have been the most turbulent period for the global economy in several decades. The USA sneezed at the outset of the sub prime disaster a year ago – and the rest of the world quickly caught a cold. Consumers around the world are inevitably struggling with the same global issues that are impacting their daily lives.”
Across the regions, the US suffered the biggest fall in its Confidence Index, dropping 17 points, while in Europe, the Nielsen Consumer Confidence Index dropped six points to 83. Nielsen Consumer Confidence Indices dropped three points in Asia Pacific and EEMEA, and two points in Latin America.
The optimistic few
Only Taiwan bucked the global trend of economic gloom, posting a buoyant 14 point increase in Nielsen’s Consumer Confidence Index in the past six months – up to 83 from 69 points.
Other countries posting an increase in consumer confidence were the Netherlands (+5), Russia, Poland, Czech Republic (+3), Brazil (+2) and Belgium (+1).
Norway, India, Indonesia and Denmark topped global rankings as the most optimistic nations in Nielsen’s Consumer Confidence Index, while Portugal, Korea and Japan languished at the bottom of rankings as the world’s most pessimistic nations.
The pessimistic majority
In the last 12 months, consumer confidence in the world’s second largest economy has plunged 19 points and Japanese consumers are not expecting things to improve anytime soon. There are also extreme levels of consumer pessimism in New Zealand, Latvia and Spain.
For many emerging countries in Eastern Europe and Asia that have enjoyed the fruits of economic growth and boom in recent years, the last six months have been a stark wake-up call as consumers find themselves struggling with a double-digit inflation, rising unemployment rates and stagflation for the first time in a decade.
A similar picture is painted in Singapore—one of the 12 markets in Asia Pacific experiencing flagging consumer confidence. “In the face of a 25-year high annual inflation rate and the rising cost of basic necessities—food, petrol, transportation--it would be unrealistic to expect Singaporeans’ confidence to be sustained at previous levels,” said Ms Santos.
In addition to escalating global issues, many countries are grappling with serious domestic troubles of their own – increasing immigration concerns in the UK and Italy, power shortages and rising crime in South Africa, loss of confidence in political stability and strikes in Europe, and the devastating effects of natural disasters in Asia.
No spare cash once all the basics covered
The latest Nielsen survey also indicated that consumers’ wages and pay packets have been stretched like never before, especially among consumers in the US and Europe. In Singapore, those who claimed not to have any spare cash remained at seven percent.
But only one in 10 consumers anticipate a global recession in 2009
Among the 44 percent of global consumers who do not think their country is currently in recession, only 26 percent said they expected to see a full blown global recession in the next year.
Topping global rankings for least expecting a global recession are Russians, South Koreans and Vietnamese – about 60 percent said they do not expect a global recession in the next year.
Over eight in 10 Singaporeans do not think their country is in recession at the moment, but amongst these consumers, close to half (47%) are bracing themselves for one.
Even the Nordic nations of Denmark (50%), Norway (46%) and Finland (45%) – countries that have always topped the Nielsen Consumer Confidence Index for their optimism – are most expectant that the world will be plunged into a global recession in the coming year.
And if a recession happens, what would local consumers be most worried about?
During times of economic slowdown, while global consumers ranked inflation (61%) as their biggest concern followed by unemployment (53%), findings reflected for Singapore were vice versa. Close to three quarters of the respondents here claimed their biggest fear to be unemployment, followed by inflation (69%)—making these the two most fundamental issues amongst locals in the event of a downturn in the local economy.
Regionally, consumers in EEMEA (69%) and APAC (67%) lead the world as most concerned about inflation during an economic downturn, while Latin Americans are most concerned about unemployment (62%) and interest rate rises (32%). Not surprising, North Americans topped global regions for concern about falling property prices (24%) while one in 10 (11%) Europeans said they would also be concerned about strikes.
About The Nielsen Global Online Consumer Survey
The Nielsen Global Online Consumer Survey, conducted by Nielsen Customized Research, was conducted in April 2008 among 28,253 internet users in 51 markets from Europe, Asia Pacific, North America and the Middle East. The largest half-yearly survey of its kind, the Nielsen Global Online Consumer Confidence and Opinion Survey provides insight into current confidence levels, spending habits/intentions and the major concerns of consumers across the globe. The Nielsen Consumer Confidence Index is developed based on consumers’ confidence in the job market, status of their personal finances and readiness to spend.
To download the PDF report, click here.
51 Markets Covered: Argentina, Australia, Austria, Belgium, Brazil, Canada, Chile, China, Colombia,Czech Republic, Denmark, Egypt, Estonia, Finland, France, Germany, Greece, Hong Kong, Hungary, India, Indonesia, Ireland, Israel, Italy, Japan, Korea, Latvia, Lithuania, Malaysia, Mexico, Netherlands, New Zealand, Norway, Pakistan, Philippines, Poland, Portugal, Russia, Singapore, South Africa, Spain, Sweden, Switzerland, Taiwan, Thailand, Turkey, UAE, United Kingdom, US, Venezuela and Vietnam.
Three markets – Colombia, Venezuela & Israel – added in April 2008; no trend data available from previous survey.
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