Expert Column: Global Consumers More Optimistic Than Last Year

By Kathleen Mancini, SVP, Nielsen

Though consumer confidence scores saw a slowdown between Q3 and Q4 of 2014, people are still finding reasons to see the glass as half full. Confidence scores improved in 39 of 60 markets year-over-year, meaning that progress is slow, but it's indeed taking place in more than half of global markets measured. Eleven markets reported double-digit confidence climbs, including the U.S. and the U.K., which rose 12 and 10 points, respectively. Other notable increases from the previous year include Romania (+15), Egypt (+14), Ireland (+13) and Bulgaria (+13).

Similarly, while all global consumer confidence indicators declined in Q4  - job prospects (-3 percentage points), personal finances (-1 pp) and immediate spending intentions (-1 pp) - year-over-year performance was positive. Just under half of global respondents (49 percent) believed the job market would be good or excellent in the next 12 months, up from 47 percent in Q4 2013. Likewise, perceptions of personal finances slightly improved to 56 percent (from 55 percent the previous year) and immediate spending intentions rose to 40 percent (from 38 percent).

Year-over-year key performance Indicator metrics improved most dramatically in North America. Job prospect expectations rose 12 percentage points to 50 percent, while the state of personal finances increased six percentage points to 64  percent, and immediate spending intentions jumped eight percentage points to 51 percent in the 12-month period. Significant improvements were also reported in the Middle East/Africa region: Job prospects increased four percentage points, personal finances rose seven points and immediate spending intentions jumped eight points, compared to Q4 2013.

Latin America was the only region to report declining year-over-year performance for all three metrics. Job prospect expectations declined 12 percentage points to 31 percent, the state of personal finances dropped three percentage points to 58 percent and immediate spending intentions declined two percentage points to 35 percent, from Q4 2013.

“There was a small step back in the fourth quarter reflecting some increased consumer apprehension, following improvements across the whole of 2014,” said Louise Keely, SVP, Nielsen and president, The Demand Institute. “Some regions of the world are still not out of the woods, including the eurozone, while others—like China and some Latin American countries—may be entering a period of slower growth in 2015."

Another important indicator of improving consumer perceptions was found in responses for recessionary sentiment. Just more than half of global respondents (53 percent) believed they were in a recession in the fourth quarter, a one-percentage point improvement from the previous quarter and a four-point improvement from the previous year (Q4 2013). Regionally, recessionary sentiment improved most in North America, declining 10 percentage points from the previous quarter and 15 percentage points from the previous year to 53 percent.

Asia-Pacific respondents showed the lowest recessionary sentiment at 41 percent, a one-point decline from the previous quarter and a three-point decline from the previous year. Latin American respondents reported the highest recessionary sentiment at 73 percent, an increase of three percentage points from the previous quarter and a rise of 12 points from the previous year. Additionally, two-thirds of European (66 percent) and Middle East/Africa (69 percent) respondents still believed they were in recession.

Other findings include:

• U.S. consumer confidence showed robust year-over-year improvement.
• Confidence in Asia-Pacific was still high despite recent declines.
• Latin American confidence continued a downward trend.
• The Middle East/Africa region showed slow, but stable progress.

For more detail and insight, download Nielsen’s Q4 2014 Global Consumer Confidence Report.