The Nielsen Global Survey of Consumer Confidence and Spending Intentions, established in 2005, measures consumer confidence, major concerns and spending intentions among more than 29,000 internet consumers in 58 countries.
Recessionary sentiment much higher in UK but cost-cutting falls
The number of European respondents who believe their country is in a recession increased by one point to 76% – and only 11% believe they’ll be out of recession in the next year, the same as in the previous quarter. In comparison, 87% of Britons believe they’re in a recession – 5% more than last quarter – and 15% believe they’ll be out of it in a year, 1% less than the previous quarter.
The number of European respondents changing their spending habits to save on household expenses dropped significantly from 67% to 62% in Q1 – its lowest level since Q3 2011. Greeks (93%) are the most likely to do this, Germans the least likely (33%. This compares to 66% of Britons – 3% fewer than last quarter – and 70% of French consumers.
The three most popular methods of cost cutting are spending less on new clothes (54%), followed by cutting down on out-of-home entertainment activities (53%) and trying to save on gas and electricity (52%). The numbers switching to cheaper grocery brands to save money dropped from 52% to 50%. Over half of Britons (58%) are switching to cheaper grocery brands compared to 54% in France and 66% in Germany.
Spare cash goes into savings or new clothes
For the second successive quarter, just 21% of European respondents report having spare cash once they’ve covered essential living expenses. The number of Britons reporting this increased dramatically from 22% to 30%; compared to just 18% in Germany and 23% in France.
Among European respondents with spare cash, one third (34%) say they save it – the highest level since Q1 2011 – 30% indicate it will go on new clothes, while 29% plan to spend it on holidays.
“Despite spare cash levels remaining consistent and saving activity reaching a two year high, European consumers appear less cautious about spending as cost-cutting activity has declined to its lowest level since the third quarter of 2011,” said Nielsen European president Christophe Cambournac. “It remains to be seen if this is simply an initial effort to start the year in a more positive frame of mind or indicative of a continuing and encouraging trend for the year.”
UK half as positive about job prospects as Germany
The percentage of Europeans feeling positive about their job prospects increased to 23% in Q1 from 22% in Q4; in Germany this stands at 48 percent, in the UK 23% Romania 14% and in France just 6%. Positivity about personal finances dropped for the second successive quarter, and is now limited to just 35% of respondents across Europe. However, 27% said now was a good time to buy ‘things wanted and needed’ over the next 12 months – up one point from Q4. This compares to 29% in the UK – its lowest level since Q3 2011.
European Consumer Confidence levels
Consumer confidence levels rose in 20 of 29 European countries in the first quarter of 2013, in a complete reversal of the fourth quarter of 2012 in which confidence levels fell in 20 countries.
Despite these increases, European consumer confidence, overall, remained at 71 index points as in the previous quarter. A score below 100 shows general pessimism. Asia Pacific (103) was up two points, North America (94) up four points, Latin America (94) down two points, and the Middle East/Africa (85) down 11 points.
Key European economies reported improved consumer confidence in the first-quarter. In particular, Germany (+4), France (+3) and many other surrounding central and northern European countries reported increases in positive sentiment for local job prospects, personal finances and spending intentions, returning to year-ago levels after a general dip. But unemployment throughout much of the Euro zone remains high.
The biggest consumer confidence increases in Europe were reported in Slovakia and Finland, up seven points each to an index of 64 and 76, respectively. A quarterly increase of six index points was reported in Denmark (95), Czech Republic (68), and Hungary (43). Norway (106), up four points, remains the only measured country in Europe enjoying net optimism, with a score above the 100 baseline.
In fact, Europe now hosts 15 of the 16 countries with the lowest measured consumer confidence. Only South Korea stands among them. The biggest fall in the last quarter was in Portugal, which dropped seven points to 31, the lowest reported score for the country since the Nielsen consumer confidence index was established in 2005.
With public debate continuing around expected immigration next year from Romania and Bulgaria to the UK and a number of other EU countries, Romania dropped a further two points in Q1 to 59 – its lowest level since Q4 2011 – while Bulgaria fell four points to 57. Greece (40), Italy (44) and Spain (47) were among the lowest reported consumer confidence scores of the 58 countries measured, but these countries did report growing optimism in Q1 over the previous quarter.
“There are some promising signs for Europe, although consumer confidence within the region remains polarised between debt-challenged southern European markets and recovering central and northern markets,” said Cambournac.