25 August 2009
Consumers’ hopes for an end to the Global Economic Crisis have been bolstered in the second quarter of 2009, according to a recent Nielsen Global Consumer Confidence Survey just released. Optimism in Singapore has improved from its previous all time low Nielsen Global Consumer Confidence Index record of 80 earlier this year, by seven points to 87, with the two key areas—job security and the economy registering dips in levels of concern.
Consumer sentiments around the world are similarly on the mend. The Nielsen Global Consumer Confidence Index, conducted in 28 markets in June 2009, rose to 82 – an increase of 5 points (from 77) from March - spurred by renewed consumer optimism and stock market gains in BRIC markets (Brazil, Russia, India, China) and key Asian countries.
“In the previous Nielsen Global Consumer Confidence survey conducted in March, we were seeing the first signs that as far as the world’s consumers were concerned, the recession had bottomed out. Three months later, they’re starting to embrace the idea of recovery – which is a major turning point,” said Paul Richmond, Managing Director, Consumer Group, The Nielsen Company Malaysia and Singapore.
In Nielsen’s latest survey, which polled 14,029 online consumers in 28 countries late in June, 71 percent of respondents thought their country was in recession – a positive reduction of six points from a high of 77 percent when the survey ran in March 2009.
“The BRIC and Asian markets have recorded the greatest jumps in Consumer Confidence Indices in the past three months,” noted Mr Richmond. “Consumer confidence in India jumped 13 Index points, and climbed nine points in Japan, South Korea, Hong Kong and Indonesia. Consumer confidence rose eight Index points in Taiwan and Brazil, and seven points in Singapore, Turkey, Russia, Philippines and the UK. The only exceptions to this upswing were in the USA and New Zealand, which held flat in the second quarter, with Germany the only country to register a decline of one Index point,” said Mr Richmond.
“This is one of the strongest indicators of a global consensus among consumers that the worst is over, and that finally, there is light at the end of this long tunnel. And consumers in emerging and Asian markets are clearly of the view that they are driving in the recovery lane now,” added Mr Richmomd.
Stock market gains in the BRIC and Asian markets have also had a major impact on consumer confidence,” said Mr Richmond. More than any other region, stock markets in Asia have rallied and property prices are starting to regain their pre-recession values. Russia’s stock market is up 60 percent from the start of the year and Taiwan is up over 50 percent. Brazil and Singapore’s stock markets have gained around 40 percent in the past six months and the South Korea and Hong Kong stock markets are up over 30 percent. With stock market gains so intrinsically linked to consumer confidence in Asian markets, it’s no surprise that Asian consumers are most confident about a receding recession, led by Hong Kong (-14 pts), Taiwan (-13 pts), Singapore and Japan (-12 pts), India and China (-10 pts).
“Positive economic news and growing consumer optimism in the past few months have definitely led consumers in these markets to believe that economic recovery will come sooner rather than later,” said Mr Richmond. According to the Nielsen survey conducted in March this year, over nine in 10 (91%) of Singaporean respondents thought the country was in an economic recession whereas the latest survey saw a reduction to 79 percent. Recent findings also reflect slightly greater optimism among consumers with 11 percent more expressing confidence that the country’s recession will be over in the next 12 months.
“While job security and the economy remain the top two worries among Singaporeans, the levels of concern have eased to some extent. From 49 percent and 48 percent respectively, levels of concern towards job security and the economy have both declined to 40 percent,” noted Mr Richmond. “The only area which registered significant degree of heightened anxiety is health, which saw a ten percent hike, likely due to the recent H1N1 pandemic,” he added.
Globally, job security and the economy also remained consumers’ top two concerns in life but even the level of these concerns has abated in the last three months and recorded declines of two and four index points respectively.
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About the Nielsen Global Consumer Confidence Survey
The Nielsen Global Consumer Confidence Survey was conducted between 15 – 29th June and polled 14,029 consumers in Europe, Asia Pacific, North America and the Middle East about their confidence levels and economic outlook. The Nielsen Consumer Confidence Index is developed based on consumers’ confidence in the job market, status of their personal finances and readiness to spend. The sample has quotas based on age and sex for each country based on their Internet users, and is weighted to be representative of Internet consumers and has a maximum margin of error of ± 1%.
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