Every region down slightly in Q4 of 2014 but confidence scores in 39 of 60 markets
improved year over year
New York, NY – Jan. 26, 2015 – Global consumer confidence ended 2014 with an index score of 96—a decline of two index points from the previous quarter, which comes after several quarters of positive momentum, according to a new study by Nielsen, a leading global provider of information and insights into what consumers watch and buy. While confidence fell slightly in every region in the fourth quarter from the previous quarter, year-over-year, the index is still above a pre-recession level of 94 from third-quarter 2007.
Consumer confidence declined one point in North America (106) and Asia-Pacific (106) in the fourth quarter—the only regions to score above the baseline reading of 100. Confidence also decreased one point in the Middle East/Africa (95), three points in Latin America (88) and two points in Europe (76) from the previous quarter.
Among the world’s biggest economies, consumer confidence decreased two points in the U.S. (106), four points in China (107) and four points in Japan (73). Conversely, confidence rose one point each in Germany (98) and in the U.K. (94).
"Confidence in more than half of the global markets measured retreated slightly in the fourth quarter with continued geopolitical tensions and some slowing in emerging-market growth,” said Louise Keely, senior vice president, Nielsen and president, The Demand Institute. “Latin American markets, such as Brazil, saw particularly large declines in confidence compared to last quarter and a year ago, reflective of the economic slowdown there. While recovery in Europe continues to be weak, and there is recent speculation of quantitative easing by the European Central Bank, confidence is still up slightly in most economies from a year ago, suggesting that fears of yet another eurozone recession have not yet hit overall consumers’ outlook. In the U.S., where labor markets have continued to recover, confidence is up significantly from its level a year ago."
Progress is slow, but it is indeed taking place in more than half of global markets measured. Confidence scores in 39 of 60 markets improved year over year. Eleven markets reported double-digit confidence climbs, including the U.S. and the U.K., which rose 12 and 10 points, respectively. Other notable increases from the previous year include Romania (+15), India (+14), Egypt (+14) Ireland (+13) and Bulgaria (+13).
Year-over-year key indicator performance metrics improved most dramatically in North America. Job prospect expectations rose 12 percentage points to 50%, the state of personal finances increased six percentage points to 64% and immediate spending intentions jumped eight percentage points to 51% in the 12-month period.
Just under half of global respondents (49%) believed the job market would be good or excellent in the next 12 months, up from 47% in fourth-quarter 2013. Likewise, perceptions of personal finances slightly improved to 56% (from 55% the previous year) and immediate spending intentions rose to 40% (from 38%).
“There was a small step back in the fourth quarter reflecting some increased consumer apprehension, following improvements across the whole of 2014,” said Keely. “Some regions of the world are still not out of the woods, including the eurozone, while others—like China and some Latin American countries—may be entering a period of slower growth in 2015."
Just over half of the global respondents (53%) believed they were in a recession in the fourth quarter, a one-percentage point improvement from the previous quarter and a four-point improvement from the previous year (Q4 2013). In total, 58% of global markets measured reported a year-over-year recessionary-sentiment improvement.
Global discretionary spending/saving intentions were either flat or declined slightly in the fourth quarter. Almost half (48%) plan to save their spare cash, about three-in-10 expect to spend on holiday/vacations (34%), new clothes (34%) and out-of-home entertainment (30%). One-fourth of global respondents plan to buy new technology (24%) and pay off debts (25%). One-fifth will spend on home improvements (21%) and invest in stocks (21%), and one-in-10 will save for retirement (10%). Globally, 13% of respondents said they have no spare cash.
U.S. consumer confidence decreased two index points in the fourth quarter to a score of 106—the first decline in 2014, but a 12-point improvement from the previous year. Confidence also declined in Canada, falling one point to an index level of 102 from the previous quarter.
While all U.S. consumer confidence indicators decreased slightly in the fourth quarter, there were significant year-over-year improvements: Job prospect confidence increased 13 percentage points to 50%, personal finance confidence increased six percentage points to 64% and the percentage of respondents who believe now is a good time to spend increased nine percentage points to 52%, from fourth-quarter 2013.
“Despite the most recent declines in the U.S. for job prospects and personal finances, consumers appear to be more upbeat than other regions going into 2015,” said Keely. “Declining unemployment, falling oil prices and the continued low interest rates together place consumers in the world’s largest economy in a better position to spend than in recent years."
Clouds of pessimism returned to the eurozone in the fourth quarter, with confidence declining in 20 of 32 markets. Only Denmark, with a consumer confidence score of 103, had an optimistic reading, and Germany and Switzerland were the only two countries where half of respondents (49% and 56%, respectively) were optimistic about job prospects in the next 12 months.
Confidence in Germany, the biggest economy in the region, increased one index point to a score of 98—a continuation of small upticks that have occurred over the past several quarters to a near-baseline score, which stands in stark contrast to the region’s average index score of 76. The biggest regional index increase compared to the third quarter came from Ireland (+6 to 90). Conversely, Russia’s index declined eight points to a score of 79 after three consecutive quarters of increases. Italy (45) and France (57) also declined, dropping two points each, compared to the third quarter.
Consumer confidence in Asia-Pacific increased in only three of 14 markets measured in the fourth quarter, but nine of 14 countries remain at or above the 100-optimism baseline. Confidence in India (129) increased three points, posting the highest index in the region and of the 60 countries measured. China’s index fell four points to 107 in the fourth quarter, which comes after four consecutive quarters at 111.
Malaysia reported the most dramatic consumer confidence decline in the region, falling 10 points to 89—the lowest score since 2009. Confidence also declined five points in Indonesia (120) and four points each in Australia (93), Japan (73) and South Korea (48).
Confidence in the Latin America region decreased three index points to a score of 88 in the fourth quarter, as scores fell in five of the seven countries measured. Peru was the only country in the region with an improved score, rising four points to 101—the highest score in the region and outperforming Brazil (95) for the first time since 2011. Confidence in Brazil dropped six points quarterly—the biggest decline and lowest score for the country since 2011. Mexico (85) decreased three points, Colombia (94) and Chile (81) decreased four points each and Argentina (67) dropped one point in the fourth quarter. Venezuela’s (70) score was flat from the previous quarter.
The outlook for job prospects declined in three of seven Latin American countries and perceptions of personal finances fell in every country except Peru. A recessionary sentiment worsened by seven percentage points in both Brazil (73%) and Chile (59%)—the highest levels since the start of tracking this sentiment in 2008.
Discretionary spending intentions showed the most dramatic pull back of all the regions, with decreases of five percentage points for new clothes (24%) and home improvements (15%), four points for new technology (16%), three points for saving (28%) and two points for out-of-home entertainment (30%). Almost one-in-five respondents (18%) said they have no spare cash, a quarterly increase of two percentage points.
Consumer confidence increased in three of five countries measured in the Middle East/Africa region in the fourth quarter. At 114, the United Arab Emirates had the highest index in the region, an increase of two points from the third quarter. Confidence also increased five points in Egypt to 90 and two points in South Africa to 88. Conversely, confidence decreased three points in Saudi Arabia to 102 and two points in Pakistan to 101.
Regionally, quarter-on-quarter discretionary spending intentions in the fourth quarter increased four percentage points each for new clothes (27%) and out-of-home entertainment (23%), two percentage points each for paying off debts (20%) and home improvements (17%) and one percentage point for retirement (6%). Twenty-two percent of Middle East/Africa respondents said they have no spare cash, which was flat from the previous quarter and the highest percentage of any region.
Consumer confidence increased four index points in Nigeria in the fourth quarter to a score of 127—the highest score of the three countries measured in Nielsen’s mobile survey for sub-Saharan Africa.
The perceived outlook for job prospects increased 12 percentage points in Kenya (62%), six percentage points in Nigeria (64%) and remained flat in Ghana (42%). Eight-two percent of Nigerian respondents were confident about their personal finances, but only just over half (56%) believed now was a good time to spend. In Kenya, 69% of respondents believed money matters were good or excellent, and 41% were confident in their current spending capacity—an increase of five percentage points from the third quarter. Likewise, 66% of respondents in Ghana were optimistic about their finances, and 36% were confident about spending.
Confidence also increased eight points in Kenya (113) and five points in Ghana (102) from the third quarter. The majority of respondents in the three countries (70% in Ghana, 61% in Nigeria and 59% in Kenya) did not have spare cash, a level that decreased in Kenya and Nigeria from the third quarter. Among those who did have discretionary funds, saving was a priority for 89% in Kenya, 86% in Nigeria, and 85% in Ghana, followed by spending on home improvement projects (73% in Kenya, 73% in Nigeria and 71% in Ghana). ABOUT THE GLOBAL SURVEY
The Nielsen Global Survey, which includes the Global Consumer Confidence Index, was established in 2005. This Nielsen Global Survey of Consumer Confidence and Spending Intentions was conducted Nov. 10-28, 2014 and polled more than 30,000 online consumers in 60 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 its Internet users and is weighted to be representative of Internet consumers. It has a margin of error of ±0.6%. This Nielsen survey is based only on the behavior of respondents with online access. Internet penetration rates vary by country.
Nielsen uses a minimum reporting standard of 60% Internet penetration or an online population of 10 million for survey inclusion. The China Consumer Confidence Index is compiled from a separate mixed methodology survey among 3,500 respondents in China.
The sub-Saharan African countries in this study are compiled from a separate mobile methodology survey among 1,600 respondents in Ghana, Kenya and Nigeria. These three countries were added to Nielsen’s measurement of consumer confidence in the first quarter of 2014 using a mobile survey methodology, which differs from the online methodology used to report consumer confidence and spending intentions for the other 60 countries outlined in this report. As such, the three sub-Saharan African markets are not included in the global or Middle East/Africa averages discussed throughout this report.
Nielsen N.V. (NYSE: NLSN) is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence and mobile measurement. Nielsen has a presence in approximately 100 countries, with headquarters in New York, USA and Diemen, the Netherlands. For more information, visit www.nielsen.com.
Andrew McCaskill: 347.331.5725; [email protected]