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, Italy and Latvia lead the pack with most people 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. South African respondents however were more concerned with a downturn in the economy leading to increased interest rates. Some 53% of SA respondents cited that interest rates going up is their biggest concern about a recession, compared to the regional average of only 21%. At the other end of the scale, 40% of the world's consumers do not believe there will be a global recession next year, led by two of the fastest developing countries - China (69%) and Vietnam (66%).
Continual decline
“In the world's leading economy, the US, consumer confidence has seen a continual decline from late 2006 on the back of a number of negative economic indicators. These include the anticipated economic slowdown, the weak dollar, rising oil prices and the sub-prime issue creating increased debt for consumers,” said Lennart Bengtsson, President of The Nielsen Company, Eastern Europe, Middle and Africa (EEMEA). “The unfavourable economic environment in the US is clearly having an impact on economies in the rest of the world, resulting in less upbeat consumer sentiment elsewhere.”
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Globally, Norway superseded India as the world's most optimistic market with a CI score of 135, up two points from the May survey. India ranked second at 133, representing a dip for the third consecutive round since its peak score of 137 in late 2006. Despite 21 countries seeing a dip in their CCI's, South Africa's Confidence Index has increased slightly from 95 to 96 since the last survey six months ago, with South Africans feeling particularly positive about the state of personal finances for the next 12 months.
As another indication of belt-tightening, 13% of global consumers said they had no spare cash after covering basic living expenses; and nearly two thirds think that it is not a good time to spend on things they want. South Africa was among the top 10 countries that shared this sentiment. Almost three quarters (73%) of SA respondents said that the next 12 months is a bad time to buy things that they want or need. Fifteen percent of South Africans said they had no spare cash after covering basic living expenses, and only 16% said they used spare cash for holidays – in contrast to the regional average of 30%.
“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 – an important signal for retailers who will need to put in extra effort to entice consumers to loosen their purse strings.” added Mr Bengtsson.
Irrespective of a global recession, consumers continue to worry most about the Economy (47%), Health (37%) and Job Security (30%) in the six months ahead. South Africa is less concerned about health (only 13% of SA respondents cited this as a concern) but once again our country tops the list in terms of concern about crime. Some 58% of locals see crime as either their first or second greatest concern, miles above others such as the next local concerns being the economy (36%) and job security (35%). This concern over crime has decreased a percentage against 59% from May 2007. Political Instability is another big concern for locals in comparison to the rest of the region
While 23% of the EEMEA region's respondents saw terrorism as being a major concern in the next six months (led by Turkey with 59%), only 2% of South Africans are concerned about this, up from 1% six months ago.
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.
*48 Markets Covered: Argentina, Australia, Austria, Belgium, Brazil, Canada, Chile, China, Czechs Republic, Denmark, Egypt, Estonia, Finland, France, Germany, Greece, Hong Kong, Hungary, India, Indonesia, Ireland, 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 and Vietnam.
