While confidence in Europe remained largely unchanged as financial conditions stabilised, perceptions about jobs, personal finances and spending intentions increased in the world’s three largest economies, US, China and Japan.
But concerns remain that macroeconomic events, such as a sharp rise in interest rates, could impair the consumer recovery, lowering the demand for home purchases, for example, or spending on big-ticket items.
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 respondents with internet access in 58 countries. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism.
Global consumer confidence indexed at 94 in the second quarter of 2013, a one-point increase from the previous quarter. The rise is part of a slow but steady upward movement reported in the first half of the year.
Consumer confidence improvements were reported in Asia-Pacific (+2 to 105), North America (+2 to 96), and Middle East/Africa (+6 to 91), compared with the previous quarter. Europe’s consumer confidence index held steady at 71 for three consecutive quarters and Latin America’s confidence declined one index point to 93 in the second quarter.
Japan’s consumer confidence index of 78 rose five points in the second quarter, its highest reading since the first quarter of 2006, amid government stimulus measures intended to jolt the economy out of almost two decades of stagnation.
In the US, a robust rebound in housing and equity markets has helped elevate confidence levels to a score of 96, an increase of three index points in the second quarter. In China, consumer confidence rose two index points to 110 in the second quarter.
In the latest round of the survey, conducted between May 13 and May 31, 2013, consumer confidence increased in 45 per cent of markets, compared with 60 per cent in the previous quarter.
Indonesia (124) reported the highest consumer confidence index for the second consecutive quarter with a two-point increase from the first quarter of 2013.
Meanwhile, Portugal reported the lowest index of 33. Pakistan reported the biggest quarterly index increase of 11 points to a score of 98. Israel’s drop of eight index points to 83 was the biggest quarterly decline.
While more than half (55 per cent) of global respondents believed their economies were still in a recession in the second quarter, it was the lowest level reported in two years.
North Americans reported the biggest three-month recessionary mindset decline of six percentage points to 69 per cent.
The improved recessionary sentiment among North Americans was driven by positive macroeconomic developments in the US. Seventy-two per cent of US respondents said their economy was in a recession – a five percentage point improvement from the first quarter and a 15 percentage point change from a five-year average (2008 to 2012), when 87 per cent of Americans felt mired in a recession.
Concern about the US economy also reported a marked decline of eight percentage points among US respondents in the second quarter, dropping to 19 per cent.
Second-quarter recessionary sentiment declines were also reported in Middle East/Africa, which dropped four percentage points to 73 per cent, in Europe, which fell two points to 74 per cent, and in Asia-Pacific, which declined one percentage point to 40 per cent. In Latin America, a growing recessionary sentiment was reported, increasing three percentage points since the start of the year to 56 per cent.
Venkatesh Bala is chief economist at The Cambridge Group, a part of Nielsen
