CONSUMER CONFIDENCE, CONCERNS AND SPENDING … · from three consecutive quarters fixed at 71....
Transcript of CONSUMER CONFIDENCE, CONCERNS AND SPENDING … · from three consecutive quarters fixed at 71....
C O N S U M E R C O N F I D E N C E, C O N C E R N S A N D S P E N D I N G I N T E N T I O N S I N I R E L A N DQUARTER 3, 2013
2 IRELAND CONSUMER CONFIDENCE
A SMALL STEP BACK AS CONFIDENCE DECREASES-1 POINT FOR IRELAND IN Q3 2013
IRELANDConsumer confidence down 1 point at an index of 69 in Q3 2013
Recessionary mind-set still evident at 93% (-2 versus Q2)
17% are optimistic about future job prospects (+1 versus Q2)
Only 29% are optimistic about their Finances (-5 versus Q2)
While only 24% are ready to spend (-2 versus Q2)
CONCERNS AND SPENDING INTENTIONS THIS QUARTER VS. LASTBiggest Concerns are Job Security (-1), the Economy (+1) and increasing Utility Bills moves from fourth to joint second position (+5)
81% say they have changed household spending in order to save (+3)
Those with ‘no spare cash’ remains unchanged at 26%, while those paying off debt increases (+1) to 28%. Those saving remains high at 31%
An increase to 77% (+8) for those ‘Switching to Cheaper Grocery Brands’
3IRELAND CONSUMER CONFIDENCE Copyright © 2013 The Nielsen Company
CONSUMER CONFIDENCE SHOWED SIGNIFICANT IMPROVEMENT IN THE UNITED STATES AND WESTERN EUROPEGlobal consumer confidence indexed at 94 in the third quarter, no change from Q2 2013, and a two-point increase from the same period last year (Q3 2012), according to consumer confidence findings from Nielsen, a leading global provider of information and insights into what consumers watch and buy. In the latest round of the survey, conducted between August 14 and September 6 2013, consumer confidence increased in all regions except Asia-Pacific.
Consumer confidence in Europe increased three index points to 74, the biggest quarter-on-quarter increase since Q1 2010 and an improvement from three consecutive quarters fixed at 71. Confidence in North America increased two index points to 98, the third consecutive quarter of increases and hit its highest level since Q3 2007. Marginal consumer confidence increases were reported in Latin America and Middle East/Africa, increasing one index point each to 94 and 92, respectively, compared to Q2. Confidence in Asia-Pacific declined one index point to 104, the first regional quarter-on-quarter decline since Q2 2012.
GIVEN THE SIZE AND SCALE OF THESE ECONOMIES, IT IS ENCOURAGING TO SEE SIGNIFICANT GAINS IN CONSUMER CONFIDENCE WITHIN THE UNITED STATES AND WESTERN EUROPE AS WE CONSIDER WHERE WE WERE LAST YEAR AND LOOK AHEAD TO 2014. AT THE SAME TIME, WE HAVE TO KEEP MODEST DEVELOPING MARKET DECLINES IN PERSPECTIVE. WHILE INDIA IS SIGNIFICANTLY OFF PEAK OPTIMISM OF 131 MEASURED THREE YEARS AGO IN 2010, IT IS STILL ONE OF THE LARGEST AND MOST CONFIDENT COUNTRIES IN THE WORLD, AND THAT HAS AN IMPACT ON THE ENTIRE REGION.
DR. VENKATESH BALA, CHIEF ECONOMIST AT THE CAMBRIDGE GROUP, A PART OF NIELSEN
4 IRELAND CONSUMER CONFIDENCE
GLOBAL CONSUMER CONFIDENCE SURVEY
60 COUNTRIES – 3-MONTH TRENDQ3-2013 NIELSEN CONSUMER CONFIDENCE INDEX
*Survey is based on respondents with Internet access. China survey results reflect a mixed
methodology. Index levels above and below 100 indicate degrees of optimism/pessimism.
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84 SOU
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85 TURKEY 87 UN
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87 AUSTRIA 88 ISRAEL
GREECE 48
88 MEXICO
CROATIA 48
92 GERMANY
SOUTH KOREA 54
PORTUGAL 55
94 PERU
**SERBIA 56
95 CHILE
SPAIN
56
96 AUSTRALIA
UKRAINE 59
96 NORWAY
SLOVAKIA 60
97 NEW ZEALAND
FRANCE 61
97 VIETNAM
BULGARIA 63
97 SAUDI ARABIA
POLAND 66 97 CANADAROMANIA 66 97 PAKISTAN
FINLAND 68
98 SWITZERLAND
IRELAND 69
98 UNITED STATES
CZECH REPUBLIC 72
98 SINGAPORE
ESTONIA 72
101 MALAYSIA
JAPAN 74
103 DENMARK
LATVIA 76
106 HONG KONG
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109 BRAZIL
VENEZUELA 76
110 C
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ITALY47
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NORTH AMERICA LATIN AMERICA EUROPE MIDDLE EAST, AFRICA, PAKISTAN ASIA-PACIFIC
94 GLOBAL
AVERAGE( 0 change from Q2-2013 )
INDEXES ABOVE 100 INDICATE OPTIMISM
5IRELAND CONSUMER CONFIDENCE Copyright © 2013 The Nielsen Company
GLOBAL CONSUMER CONFIDENCE SURVEY
TROUBLED ECONOMIES: CONSUMER CONFIDENCE IS IMPROVING
60 COUNTRIES – 3-MONTH TRENDQ3-2013 NIELSEN CONSUMER CONFIDENCE INDEX
RECESSION -BATTERED EUROPE SHOWED SIGNS OF RECOVERYSeventy percent of European markets reported consumer confidence increases in the third quarter as improvements across all confidence indicators showed positive, albeit marginal, regional momentum. Positive perceptions about local job prospects (26%), personal finances (36%) and a good time to buy (29%) increased 2, 1 and 2 percentage points, respectively, compared to the second quarter.
Good news was reported among Europe’s most troubled economies, with consumer confidence increases in Portugal, Italy, Greece and Spain. In addition to Portugal’s double-digit confidence boost of 22 index points, other hard-hit austerity markets showed increased optimism. Spain’s index increased eight points to 56, Italy rose six points to 47, and Greece inched up one point to 48. Despite a one-point quarterly confidence decline in Ireland, an index score of 69 was a two-point improvement from one year ago.
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6 IRELAND CONSUMER CONFIDENCE
Consumer confidence index scores were highest in Denmark (103), Switzerland (98), Norway (96) and Germany (92), and most improved in Portugal (55), Belgium (81), Spain (56), France (61), the United Kingdom (87) and Italy (47), compared to Q2.
“GERMAN CONSUMERS WERE OPTIMISTIC IN THE THIRD QUARTER, WHICH WAS NOTEWORTHY GIVEN THE SURVEY WAS FIELDED DURING THE PHASE OF ELECTION CAMPAIGNS WHERE COST-CRITICAL TOPICS SUCH AS TAX INCREASES, THE RESCUE OF THE EURO, AND ENERGY COSTS MAY HAVE PLAYED AN IMPORTANT ROLE. RATHER THAN TAKE A PESSIMISTIC VIEW OF THE FUTURE, IT APPEARS THAT GERMANS REMAINED SOMEWHAT UNAFFECTED BY THE POLITICAL ENVIRONMENT AS FUNDAMENTAL ECONOMIC DATA WERE LIKELY PERCEIVED AS ROBUST. AS THE DEVELOPMENT OF COALITION TALKS CONTINUE, HOWEVER, CONSUMER CONFIDENCE SENTIMENT WILL BE CLOSELY MONITORED.”
INGO SHIER, MANAGING DIRECTOR, NIELSEN GERMANY
7IRELAND CONSUMER CONFIDENCE Copyright © 2013 The Nielsen Company
IRELAND CONSUMER CONFIDENCE Q3 2013IRELAND CONSUMER CONFIDENCE INDEX TREND 2005-2013(VERSUS GLOBAL, EU, UK, FRANCE AND USA)
SLIGHT FALL IN IRELAND’S CONSUMER CONFIDENCE MAY INDICATE A ‘WAIT AND SEE’ APPROACH...Ireland’s consumer sentiment dipped to 69 this quarter (-1pt versus Q2 2013, +2pts on Q3 2012). While people do feel job prospects have improved, they are more negative this quarter in relation to their personal finances and their readiness to spend, reflecting a cautious approach with a seventh austerity budget around the corner on 15th October.
Pieces of positive news around improving general economic conditions in Ireland continue to seep out; unemployment is down (13.3%, Sept 2013, CSO), house prices are rising and inflation is low. Business activity also brightened this quarter as the latest KBC Bank / Chartered Accountants Business Sentiment Study* revealed. It found that a significant number of firms were reporting increased activity levels and among a much broader range of companies. The Nielsen Consumer Confidence survey found that there was also an improved view on general business conditions as 44% of respondents rated them as good/normal, up 5pts on Q2 2013.
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GLOBAL GB IRELAND FRANCE USA
Celtic Tiger Days Recession Ireland now ranks 17th
most pessimistic globally in Q3 2013
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SLIGHTLY LESS PESSIMISM ON IRELAND’S RECESSIONARY STATUS…While still significantly higher than the European average of 72%, 93% of respondents say Ireland is still in an economic recession, that’s down -2pts on the previous quarter. Those that feel Ireland will be out of recession in the next twelve months has increased this quarter from 10% to 13%.
RECESSIONARY SENTIMENT Q3 2013
PERCENT GLOBALLY SAYING THE COUNTRY IS IN A RECESSION
Source: Nielsen Global Online Survey - Q3 2013
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63%
74%
72%
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ASIA PACIFIC
GLOBAL
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IRELAND
SAY WE ARE STILL INRECESSION
9IRELAND CONSUMER CONFIDENCE Copyright © 2013 The Nielsen Company
PERSONAL FINANCES AND READINESS TO SPEND
‘STATE OF PERSONAL FINANCES / READINESS TO SPEND?’ Q3 2013 IRELAND
PERSONAL FINANCES ARE GOOD / OR EXCELLENT
IT IS A GOOD TIME TO BUY THINGS I WANT OR NEED
Source: Nielsen Global Online Survey - Q3 2013
BIGGEST CONCERNS AND SENTIMENTSJob Security continues to be the primary concern this quarter (-1). Increasing Utility Bills takes a jump on the list (+5) and moves into joint second position with the economy (+1). Our overall second biggest concern this quarter remains unchanged with Increasing Utility Bills at 18%.
As unemployment rates fall to their lowest levels in three years, the percentage of people who think job prospects are good or excellent increases to 17% this quarter (16% in Q2 2013), with European and Global scores also showing an improvement. However, there is slightly less optimism around personal finances. Those who feel their personal finances over the next twelve months are good or excellent falls from 34% in Q2 2013 to 29%. Furthermore, only 24% feel it is a good time to buy the things they need or want, compared to 26% last quarter.
GLOBAL55% 36% 29% (-5)
GLOBAL
EUROPE
EUROPE
IRELAND
IRELAND38% 29% 24% (-2)
10 IRELAND CONSUMER CONFIDENCE
Irish consumers have not stopped changing their spending habits in order to save money. This score rose again this quarter with 81% of respondents saying that compared to this time last year they had changed their spending to save on household expenses (+3pts on Q2 2013). This is the highest score of all European countries (joint highest position with Italy) and 21pts higher than the European average of 60% illustrating the strong reaction Irish consumers are continuing to have to their changed economic circumstances.
‘COMPARED TO THIS TIME LAST YEAR, HAVE YOU CHANGED YOUR SPENDING TO SAVE ON HOUSEHOLD EXPENSES?’ Q3 2013
HAVE WE CHANGED SPENDING HABITS
81%78%
85% 84% 81%
Q3 2013 Q2 2013 Q1 2013 Q4 2012 Q3 2012
IRELAND
Source: Nielsen Global Online Survey - Q3 2013
11IRELAND CONSUMER CONFIDENCE Copyright © 2013 The Nielsen Company
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-4% +1% +1 -4% +1% -1% -2%
SAVING AND DISCRETIONARY SPENDING INTENTIONSThose saying they ‘have no spare cash’ remains unchanged at 26% this quarter, although still high compared to the European average of 21%. Once essential living expenses are covered; over one third of Irish respondents (31%) are putting spare cash they do have into savings, while 28% are paying off debts.
Spending on new clothes is only spending area to increase on the last quarter with 20% choosing to spend their spare cash here (+1pt). Spending on home improvements/decorating (21%), out of home entertainment (15%) and retirement fund (4%) are all unchanged on Q2 2013. Spending on holidays saw the largest decline with 22% choosing to spend their spare cash here (-4pts).
WHERE DO WE SPEND OUR SPARE CASH?
“Q - ONCE YOU HAVE COVERED YOUR ESSENTIAL LIVING EXPENSES, WHICH OF THE FOLLOWING STATEMENTS BEST DESCRIBES WHAT YOU DO WITH YOUR SPARE CASH...?” Q3 2013 IRELAND
(% chg is versus Q2 2013)
Source: Nielsen Global Online Survey - Ireland Results Q3 2013
12 IRELAND CONSUMER CONFIDENCE
“Q. COMPARED TO THIS TIME LAST YEAR, WHICH OF THE FOLLOWING ACTIONS HAVE YOU TAKEN IN ORDER TO SAVE ON HOUSEHOLD EXPENSES? Q3 2013 IRELAND
HOUSEHOLD SAVING STRATEGIESNo sign of Irish consumers loosening the purse strings yet as respondents cutting spend to save has increased again in many areas this quarter. There has been a significant increase in the percentage saying they have switched to cheaper grocery brands at 77% (+8pts), this is the highest level of all European countries and 24pts higher than the European average of 53%. While saving on gas and electricity has decreased this quarter at 63% (-9pts).
In terms of lifestyle choices respondents say they will spend less on new clothes (73%, +4pts) and use their car less often (42%, +5pts) while those choosing to cut down or buy cheaper brands of alcohol has also increased at 32% (+2pts).
Furthermore there is no end in sight as many respondents feel they will continue to use these saving strategies once economic conditions improve.
HOUSEHOLD SAVING STRATEGIES
DOMESTICSwitch to Cheaper Grocery Brands 77% (+8%)
Save on Gas & Electricity 63% (-9%)
Cut down on Telephone Expenses 51% (+3%)
Delay Upgrading PC or Mobile 51% (+7)
Look for Better Deals on Loans etc. 44% (-1%)
Delay Replacing HHLD items 44% (+3%)
LIFESTYLESpend Less on New Clothes 73% (+4%)
Cut down on Take-Aways 62% (+2%)
Cut down on OOH Entertainment 61% (-1%)
Cut down on Holidays/Breaks 53% (-1%)
Use my Car less often 42% (+5%)
Cut Down /buy Cheaper Brands of Alcohol 32% (+2%)
Cut down on At-Home Entertaining 30% (+6%)
(% chg is versus Q2 2013)
Source: Nielsen Global Online Survey - Ireland Results Q3 2013
13IRELAND CONSUMER CONFIDENCE Copyright © 2013 The Nielsen Company
Hungary
Global Avg
China
Japan
Belgium
Czech Republic
Germany
Denmark
Estonia Finland
France GB
Greece Ireland
Italy
Netherlands
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Poland Russia
Sweden
Turkey
Saudi Arabia
Mexico
US
Canada
Brazil
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WILL CONTINUE TO SWITCH TO CHEAPER GROCERY BRANDS POST RECESSION
Spain EU Avg
Source: Nielsen Global Online Survey - Q3 2013
SWITCHING TO CHEAPER GROCERY BRANDS
‘COMPARED TO THIS TIME LAST YEAR, HAVE YOU CHANGED YOUR SPENDING TO SAVE ON HOUSEHOLD EXPENSES?’ Q3 2013
SWITCHING TO CHEAPER GROCERY BRANDS IN LAST YEAR / WILL CONTINUE TO DO SO POST RECESSION
BUBBLE SIZE: CONSUMER CONFIDENCE INDEX LEVEL
14 IRELAND CONSUMER CONFIDENCE
SUMMARY: ONE SMALL STEP BACK BUT SOME POSITIVE INDICATORS TOOWhile the drop in consumer confidence is not significant this quarter, it does reflect the volatile sentiment which still exists among Irish consumers, even in the face of positive economic news for the country. However there is some good news to be taken from the latest data release, with more respondents feeling that job prospects and general business conditions are good, as reflected in falling unemployment rates and increasing business activity.
With the October budget figures released and at the lower end of the scale (an adjustment of €2.5bn. as opposed to €3.1bn.) it is hoped that the final quarter of 2013 will see certainty return for consumers as we head into the important Christmas shopping period. While consumers are expected to continue their cautious spending approach, it is hoped that with time the level of fear over job security and the future in general will decrease, allowing some savings to be released into the economy.
Sources:*Source: KBC Bank / Chartered Accountants Business Sentiment Study, published 10 October 2013 http://www.kbc.ie/media/BusinessSentimentQ3132.pdf
“IT IS DISAPPOINTING TO SEE A SMALL DECREASE IN CONSUMER SENTIMENT THIS QUARTER, JUST AS IRELAND WAS ON AN UPWARD TREND, HOWEVER TAKING INTO ACCOUNT THE UNCERTAINTY SURROUNDING THE OCTOBER BUDGET AND THE END OF THE GOOD WEATHER IT IS NOT SURPRISING THAT PEOPLE FEEL A LITTLE GLOOMY. MORE SIGNIFICANT IS THAT AS TIME GOES ON SAVING STRATEGIES ARE GROWING IN USE AND BECOMING MORE ENTRENCHED IN CONSUMERS’ MINDS AND THESE POSE A HUGE CHALLENGE FOR RETAILERS AND MANUFACTURERS.”
SHANE DALY, NIELSEN IRELAND
IRELAND CONSUMER CONFIDENCE
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ABOUT THE NIELSEN GLOBAL SURVEY The Nielsen Global Survey of Consumer Confidence and Spending
Intentions was conducted between August 14 and September 6, 2013
and polled more than 30,000 online consumers in 60 countries
throughout Asia-Pacific, Europe, Latin America, the Middle East,
Africa and North America. 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 ±0.6%. This Nielsen survey is based on the behavior of
respondents with online access only. Internet penetration rates vary
by country. Nielsen uses a minimum reporting standard of 60 percent
Internet penetration or 10M online population for survey inclusion.
The China Consumer Confidence Index is compiled from a separate
mixed methodology survey among 3,500 respondents in China.
The Nielsen Global Survey, which includes the Global Consumer
Confidence Index, was established in 2005.