Monday, July 18, 2011

Global Consumer Confidence Drops *More consumers slip back to recessionary sentiment*

# # #

Nielsen Global Online Consumer Confidence Survey

Lowest in 6 Quarters Global online confidence declined to its lowest level in six quarters to 89 for Q2 2011 as economic recovery hit a stumbling block and recessionary jitters again reverberated around the world, according to Nielsen’s quarterly Global Online Consumer Confidence Survey. Prior readings were 92, 90, and 90 for Q1 2011, Q4 2010, and Q3 2010, respectively. Asia Pacific was highest with 98, followed by Middle East, Africa, Pakistan at 94, Latin America 91, North America 81, and Europe 74. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism..

Key Points Key takeaways from the Q2 2011 Nielsen Global Online Consumer Confidence Survey are:
● 58% of global online consumers said they are still in a recession – the most in the past year. More than half believe they will still be in a recession in a year’s time.
● 31% of U.S. consumers said they have no spare cash for discretionary spending, along with 25% of Middle East/Africa consumers and 22% of Europeans.
● Indian consumers, despite a five point quarterly decline, remained the most positive.
● Largest confidence declines in Q2 were recorded in Egypt and Saudi Arabia, which had enjoyed the biggest increases in Q1 2011.
● Increasing utility bills and inflation again eclipsed the economy and job security as main concerns in Europe.
● Latin America consumer confidence edges up one index point to 91.

Recessionary Mindset “There wasn’t enough positive news to inspire confidence among global online consumers in the second quarter,” said Dr. Venkatesh Bala, Chief Economist at The Cambridge Group, a part of Nielsen. “Weak economic figures, slowing manufacturing performance and inflation in Asia, an intensifying debt crisis in Europe and continuing political instability in the Middle East combined with rising household expenses in the U.S. have taken their toll on consumers’ fragile confidence. Hopes for full global recovery in the next 12 months substantially weakened in Q2 as the majority of consumers around the world remained in a recessionary mindset.” “Second quarter data revealed that consumers have retreated back into a recessionary mindset and they are tightening their belts again after the last 12 months of slowly improving, but cautious spending,” said Dr. Bala. “According to the latest survey, consumer allocation intentions declined globally in all discretionary areas from investing in stocks and buying clothes to taking holidays and upgrading technology compared to three months ago. For the outlook to improve for the rest of the year, consumers globally will look to greater stability in food and energy prices, as has begun to occur recently, along with abatement of region-specific concerns.”

Prolonged Recession Sentiment In another indication of how consumers are prolonging the recession sentiment, 58 percent of global online consumers said they are still in a recession – the most in the past year. Of those, more than half (51%) believe they will still be in a recession in a year’s time. The number of Asia Pacific online respondents who said they are currently in recession rose from 37 percent in Q1 2011 to 45 percent in Q2. And in Middle East/Africa, the economic recession lives on for 74 percent of online respondents - an increase of nine points from three months ago.

Spending Intentions Decline Twelve months ago, 35 percent of global online consumers said the present was a good time to buy the things wanted and needed, but this figure dropped to 27 percent in second quarter with significant pull back among North American and Asia Pacific consumers. At the start of this year, 27 percent of North American consumers said it was a good time to buy, but this receded to 20 percent last quarter. Likewise, one year ago, 40 percent of Asia Pacific consumers felt it was a good time to buy things needed and wanted, but this figure fell to 32 percent in Q2. More consumers globally are feeling cash strapped as cost of living expenses and rising food and energy inflation continue to squeeze household budgets. Rising food prices was again consumer’s top global concern, surpassing the economy as the top concern for the second quarter in a row. Thirty-one percent of U.S. consumers said they have no spare cash for discretionary spending, along with 25 percent of Middle East/Africa consumers and 22 percent of Europeans.

U.S. Consumer Confidence Drops Consumer confidence in the U.S. fell five index points to 78, two points lower than the previous consumer confidence low of 80 points in the first half of 2009 at the height of the global recession. Canada’s consumer confidence index holds steady at 101, dropping just one point from year ago and previous quarter findings. “With rapidly rising gas prices, inflationary pressures at check-out, continued woes in the housing market with home foreclosures and declining property values, unsettling weather patterns creating flooding and tornado damage and a stagnant job market, confidence among U.S. consumers fell in the second quarter,” said Todd Hale, SVP Consumer & Shopper Insights, Nielsen U.S. “On the U.S. retail front, the top 20 percent of households have exited the recession, while all other households are showing continued restraint in shopping trips and spending,” continued Hale. “Consumer-packaged-goods dollar sales were off 0.4 percent for the 52-weeks ending June 11, 2011, while dollar sales for the latest quarter within that 52-week period were up 0.5 percent – the second consecutive quarter of at least modest growth.”

About the Nielsen Global Online Consumer Confidence Survey The Nielsen Global Online Consumer Confidence Survey, established in 2005, tracks consumer confidence, major concerns and spending intentions among more than 31,000 Internet consumers in 56 countries. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism.

Charts & Analysis

USA and Global economic charts
Apple (AAPL) financial performance and stock charts
Google (GOOG) financial performance and stock charts
Microsoft (MSFT) financial performance charts
Intel (INTC) financial performance charts
VMware (VMW) financial performance charts (CRM) financial performance charts
Rackspace (RAX) financial performance charts
USA failed and problem banks
Federal Reserve statistical releases
JPMorgan Chase & Co. (JPM) financial performance charts
Citigroup (C) financial performance charts
Goldman Sachs (GS) financial performance charts
Wells Fargo (WFC) financial performance charts
Bank of America (BAC) financial performance charts
Morgan Stanley (MS) financial performance charts
S&P 500 (SPX) charts and review
China economic, Internet, and technology news
Baidu (BIDU) financial performance and stock charts
Select news regarding the Universe, Earth, Humanity, the Future

Visit Osprey Port News Network!
Apple, Google, Baidu, China, technology, financial system, stocks, markets, economy, science, environment, future

Follow Neo Solomon (@NeoSolomonX) on Twitter!

# # #