Consumer confidence levels in Europe, already the lowest in the world by some margin, declined still further in the fourth quarter of 2012, and more than in any other region globally, according to the latest figures from Nielsen.
European consumer confidence fell to 71, down three index points on the previous quarter. A score below 100 shows general pessimism. Around the world, Latin America (96) was up two points, Asia Pacific (101) up a point, North America (90) down a point, and the Middle East/Africa (96) down two points.
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.
Consumer confidence fell in 20 of the 29 European markets measured in the report, with 10 markets posting a confidence decline of at least six points from Q3 2012, said researchers. The biggest European decline was reported in Belgium, down 14 points from the previous quarter to 74. The biggest European increase was in the UK, up two points to 79. Germany increased one point to 87; France decreased nine points to 52.
Europe accounts for eight of the 10 countries with the lowest confidence levels measured globally by Nielsen: Greece (35), Hungary (37), Portugal (38) – the lowest three globally – Italy (39), Croatia (42), Spain (46), France (52) and Slovakia (57).
India has the highest consumer confidence levels globally (121), whilst Norway (102) has the highest in Europe and the eighth highest globally.
“The economic concerns of global consumers are increasing and these are being affected by worries that the Eurozone crisis could spread from troubled countries to core countries,” said Nielsen European president Christophe Cambournac. “Europe remains the major concern for global demand. Consumer confidence is fragile here and any poor policy decisions within the European Union or by individual countries could see this fragility take hold more widely.”
Positive outlook declining
The percentage of Europeans feeling positive about job prospects dropped to 22% in Q4 from 25% in Q3; in Germany this stands at 45%, in the UK 23% and in France just 6%. Positivity about personal finances dropped two points to 36% across Europe, whilst only 26% said now was a good time to buy ‘things wanted and needed’ over the next 12 months – down one point from Q3.
Recessionary sentiment and cost-cutting both rise
Although the number of European respondents who said they believe their country is in a recession remained at 75% – only 11% believe they’ll be out of recession in the next year, down two points from the previous quarter. Consequently, the number of European online consumers changing their spending habits to save on household expenses rose from 65% to 67% in Q4. According to survey responses, Greeks (92%) are the most likely to do this, Norwegians the least likely (41%). This compares to 69% of Britons, 68% of French consumers and 53% of Germans.
The three most popular methods of cost cutting remain spending less on new clothes (58%), followed by cutting down on out-of-home entertainment activities (53%) and switching to cheaper grocery brands (52%). Over half of Britons (56%) are switching to cheaper grocery brands compared to 61% in France and 64% in Germany.
Spare cash goes into savings or new clothes
Just 21% of European respondents now say they have spare cash once they’ve covered essential living expenses, (22% in the UK and Germany, 23% in France.)
Among European respondents with spare cash, one third (32%) say they save it, 31% indicate they spend it on new clothes, while one quarter (26%) pay off debts, credit cards and loans.
Cambournac said: “European consumers are indicating they are further tightening their belts and changing their spending habits. Less positivity about the future is causing a rise in their cost-cutting activities and greater caution, whilst saving and paying off debts are amongst the most popular uses for any spare money. However, there are positive signs for manufacturers of cheaper clothes and grocery brands as Europeans indicate they are likely to switch to these types of products to save money.”