Nielsen Global Consumer Confidence Q4 2011

2 Copyright © 2012 The Nielsen Company.

Global consumer confidence increased one index point last quarter to 89, while Europe led confidence declines in 24 of the region’s 27 measured markets, according to fourth quarter 2011 global consumer confidence findings from Nielsen, a leading global provider of information and insights into what consumers watch and buy.

“While Europe’s challenging economic conditions in the second half of 2011 bought renewed vulnerability and fragility to consumers and financial markets globally, some of the most positive news last quarter came from the world’s two largest economies—the U.S. and China—where confidence rebounded to Q1 2011 levels,” said Dr. Venkatesh Bala, Chief Economist at The Cambridge Group, a part of Nielsen. “Buoyant domestic consumption also maintained confidence levels in the large emerging economies of India, Indonesia and Brazil. However, slowing GDP growth within emerging economies and inflationary pressures would suggest some degree of caution for the year ahead.”

In the latest round of the survey, conducted between November 23 and December 9, 2011, overall confidence levels fell in 60 percent of global markets measured with confidence declines in 35 out of 56 markets. Confidence rose in 12 markets and remained flat in nine.

The Nielsen Global Survey of Consumer Confidence and Spending Intentions established in 2005, tracks consumer confidence, major concerns and spending intentions among more than 28,000 Internet consumers in 56 countries. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism.

China confidence increases four points to 108

More than half (52%) describe finances as excellent/good, but 65% think it is not a good time to buy

Consumer Confidence around the world increases one point to 89

Confidence declines in 24 of 27 European markets

U.S. consumer confidence index increases 6 points to 83

OVERALL CONFIDENCE LEVELS FELL IN 60% OF GLOBAL MARKETS MEASURED

Copyright © 2012 The Nielsen Company. 3

Index levels above and below 100 indicate degrees of optimism/pessimism

No change

Increase

Decrease

-730

HUNGARY

-436

PORTUGAL

-1041

GREECE

-643

CROATIA-346

SOUTH KOREA

-349

ITALY

-155

SPAIN

-155

FRANCE

-460

IRELAND

-1265

CZECH REPUBLIC

-666

ESTONIA

-168

LATVIA

-269

LITHUANIA

-276

FINLAND

-977

BELGIUM

-281

MEXICO-583

TURKEY

-584

RUSSIA

-585

NETHERLANDS

-187

ARGENTINA-187

ISRAEL

-288

SWEDEN

-690

AUSTRIA

-890

NEW ZEALAND

-592

EGYPT

-792

SWITZERLAND

-495

PERU

-398

NORWAY

-599

HONG KONG

-5104

THAILAND

-7113

SAUDI ARABIA

056

JAPAN

078

SOUTH AFRICA

085

CHILE

087

GERMANY

094

SINGAPORE

096

CANADA

0101

MALAYSIA 0105

UNITED ARAB EMIRATES

0112

BRAZIL

+683

UNITED STATES

+580

VENEZUELA

+1059

ROMANIA

+389

PAKISTAN

+289

DENMARK

+399

VIETNAM

+595

COLOMBIA

+6103

AUSTRALIA

+4108

CHINA

+3117

INDONESIA

+5117

PHILIPPINES

+1122

INDIA

+189

GLOBAL AVERAGE

LOW TIER COUNTRIES – 89 TO 30

TOP TIER COUNTRIES – 101 AND HIGHER

MID TIER COUNTRIES – 100 TO 90

-370

UKRAINE

-271

UNITED KINGDOM

-1671

TAIWAN

-272

POLAND

Source: Nielsen Global Survey of Consumer Confidence and Spending Intentions, Q4 2011

Nielsen Global Consumer Confidence Index—56 Countries, Q4 2011

Q4 2011 vs. Q3 2011


More than half (52%) of global online consumers described their personal finances for 2012 as excellent/good, up from 50 percent in Q3 2011, but 65 percent indicated it is not a good time to buy, up one percent from the previous quarter.

“Overall, consumer discretionary spending will remain restrained and cautious in the first half of 2012,” said Dr. Bala. “Despite consumers becoming more confident about their personal finances for the year ahead, there is still a reluctance to spend, especially in the West; rising tensions in the Middle East and their impact on gasoline prices could further compound global consumer concerns and spending plans,” added Dr. Bala.

Consumer concern for the economy increased as a top fear among 18 percent of global respondents—an increase of six points from last quarter, which resulted in nearly two-thirds (64%) of consumers around the world indicating they believe they are in a recession, up from 62 percent last quarter. A growing number of online respondents in Asia Pacific (53%), Europe (74%), Middle East/Africa (74%) and Latin America (47%) indicated they believe they are in a recession. And while 86 percent of North Americans feel they are in a recession, it was the only region to report an improvement from 88 percent in third quarter.

Personal finances are improved, but spending is still restrained


Personal finances are up, but good time to buy is down

GROWING NUMBER OF CONSUMERS BELIEVE THEY ARE IN A RECESSION

Not a good time to buy52%

53%

65%Personal finances good/excellent

Asia Pacific Q4

50%Q3

47%Latin America Q4

46%Q3

74%Europe Q4

71%Q3

74%Middle East/Africa Q4

73%Q3

86%Q4

88%Q3

North America


Boosted largely by an improved outlook in personal finances for the year ahead, North America posted the biggest regional quarterly gain among global regions (+5 points) to 84, while Asia Pacific (99) and Latin American (98) were the world’s most confident regions with quarterly increases of two and one point(s), respectively. Confidence fell by one point in the Middle East/Africa (95), and Europe recorded its lowest regional confidence reading since Q1 2009 at 71 points, a quarterly decline of three points.

India remained the world’s most optimistic market for the eighth consecutive quarter with a one point consumer confidence index increase to 122, followed by Indonesia and the Philippines at 117. Hungary was the world’s most pessimistic market at

30 index points, followed by Portugal (36) and Greece (41), where quarterly confidence levels fell seven, four and 10 points, respectively. European markets accounted for nine of the 10 most depressed markets last quarter.

The biggest quarterly confidence gains last quarter came from Romania (+10), the United States and Australia (+6), Venezuela, Philippines and Columbia (+5) and China (+4), while the steepest quarterly declines came from Taiwan (-16), Czech Republic (-12), Greece (-10) and Belgium (-9).

Regional Roundup


Asia Pacific dominates the top 10 Consumer Confidence Index scores, Europe leads the bottom

122

117

117

113

112

108

105

104

103

101

30

36

41

43

46

49

55

55

56

59

India

Indonesia

Philippines

Saudi Arabia

Brazil

China

UAE

Thailand

Australia

Malaysia

Hungary

Portugal

Greece

Croatia

South Korea

Italy

France

Spain

Japan

Romania

HighestLo

west


Consumer confidence rises in the U.S. and China Americans saw an improvement in their personal finances for the year ahead with nearly half (49%) saying their personal financial prospects looked good/excellent, up from 43 percent compared to the previous quarter, which spurred a six-point consumer confidence index jump to 83 in Q4.

“While there are headwinds impacting the consumer such as weak housing, elevated commodity prices and uneven growth, recent gains in the U.S. labor market are positively impacting sentiment, although we are still well below pre-recession highs,” said James Russo, VP Global Consumer Insights. “Elevated levels of long-term unemployment along with a stubbornly high percentage of consumers reporting they have no spare cash (32%), raises a caution flag for 2012 spending. Additionally, over the past year consumers have been drawing down savings to spend in the absence of real income and wage growth, a situation which will have to change in order for them to boost or even sustain their spending.”

While a boost in U.S. consumer confidence is positive, the index is still at the same level when the recession hit. “There is still a great deal of consumer angst regarding the health of our economy and health of consumer finances,” said Todd Hale, SVP Consumer & Shopper Insights, Nielsen U.S. “Across consumer packaged goods retailing, inflationary pressures, not increased consumer demand, have had the biggest impact on departments and categories exhibiting dollar volume growth through the third quarter of 2011.”

“In China, the easing of food inflation over the past five months has significantly driven food prices down and adjustments to macro-economic policies have re-energized growth, particularly through more loans, which partly resulted in the four point confidence climb to an index of 108,” said Yan Xuan, President, Nielsen Greater China. “Continued government and non-government investment in developing the country’s western and northeastern regions plus less dependence on manufacturing export in these regions is also fueling optimism among Chinese consumers.”

100

90

110

80

70

China

U.S.

Q1 Q3 2005

Q1 Q3 2006

Q1 Q3 2007

Q1 Q3 2008

Q1 Q2 Q3 Q4 2009

Q1 Q2 Q3 Q4 2010

Q1 Q2 Q3 Q4 2011

+4

+6

Consumer confidence rises in the U.S. and China



Jobs and finances remain fragile and vulnerable in Europe“Consumer confidence fell in 24 out of 27 European markets measured by Nielsen last quarter as the impact of the region’s debt crisis, currency woes and Italy’s political and economic uncertainty sent shockwaves throughout the region and into international financial markets,” said Dr. Bala. “With the Euro zone already slipping into recession and the introduction of new or further austerity measures due to take effect in major European economies at the start of this year, the region’s outlook for job prospects and personal finances remains fragile and vulnerable for the year ahead,” added Dr. Bala.

In Q4 2011, less than one in four (23%) Europeans rated job prospects as good/excellent, down from 26 percent in Q3, and 28 percent from a year ago. And while job prospects are looking more upbeat among Germans, where more than half (52%) rated employment opportunities as good/excellent (up 11 percent year-on-year), job prospects continue to be bleak for recession-hit Southern European markets of Italy, Greece and Spain.

“Germany’s economic situation is stable on a relatively high level,” said Ivar Michaelsen, Group Managing Director, Nielsen Germany. “German consumers feel concerned regarding the economic situation in general because of the ongoing Euro crisis, but they do not expect direct effects on their personal situation for the moment. As a consequence, German consumers are at this stage relatively confident about their personal perspectives with regard to their jobs, personal finances and buying intentions for the year ahead.”

Italy, Belgium, Czech Republic, Hungary, Ireland, Italy, Portugal, Spain and Croatia all recorded a six-year confidence low last quarter. “In Hungary, a perfect storm of factors is contributing to low and declining consumer confidence,” said Judit SzalokyToth, Managing Director, Nielsen Hungary. “Rising taxes and unpredictable government regulations coupled with declining disposable income has fueled insecurity and pessimism among consumers.”

In Spain, a favorable outlook for job prospects fell to 10 percent in Q4—down from 25 percent the prior year. In Italy, good/excellent employment sentiment fell ten points year-on-year to eight percent last quarter. And in Greece, a positive job outlook declined to four percent from 11 percent last year.

Consumer confidence fell in 24 of 27 European markets measured


No change

Increase

Decrease

89

59

9298

85848377 76

72 71 706968666560

55 5549

4341 3630

90 8887

Nor

way

Switz

erla

nd

Aus

tria

Den

mar

k

Swed

en

Ger

man

y

Net

herla

nds

Russ

ia

Turk

ey

Belg

ium

Finl

and

Pola

nd

Uni

ted

King

dom

Ukr

aine

Lith

uani

a

Latv

ia

Esto

nia

Cze

ch R

epub

lic

Irela

nd

Rom

ania

Fran

ce

Spai

n

Ital

y

Cro

atia

Gre

ece

Port

ugal

Hun

gary


Asia Pacific continues as the most optimistic regionAsia Pacific continues as the most optimistic region, boasting seven of the top 10 highest index scores. Confidence rose in nearly half (six of 14) of the Asia Pacific markets in the Nielsen survey, fell in five and remained flat in three—Malaysia, Singapore and Japan. Taiwan’s decline of 16 points to an index of 71, the lowest point in 24 months and approaching levels following the 2008 global financial crisis, was most notable.

India’s one point consumer confidence index increase to 122 is the highest score of 56 countries measured, followed by Indonesia and the Philippines with an index of 117. “The stabilization of India’s consumer confidence metric is encouraging and the retention of the top spot globally reminds us of the inherent strength of the Indian economy, the savings mindset of the Indian consumer, and the positivity of consumer sentiment which has likely been helped by the recent cooling of inflationary pressure,” said Justin Sargent, Managing Director, Nielsen India.

“The sharp drop in Taiwanese consumer confidence is mainly driven by a strong decline in job prospects and a rise in concern for the current economic environment,” said Emilie Darolles, Managing Director, Nielsen Taiwan. “In the short term, we expect consumers’ willingness to spend to slow down and the propensity to save to increase. The upcoming Chinese New Year Festival will likely help boost some of the domestic consumption in Q1, but Taiwanese consumers will continue to be conservative in 2012.”

35%

36%

30%

19%

35%

26%

64%

33%

13%

7%

2%

29%

31%

22%

19%

28%

28%

48%

19%

10%

16%

2%

Putting intoSavings

Holidays/Vacations

New Clothes

Out-of-Home Entertainment

Pay off Debts/ Credit Cards/ Loans

New Technology Products

Home Improvement/ Decorating

Investing in Stocks/Mutual Funds

I Have No Spare Cash

Retirement Fund

Don’t Know/ Undecided


Compared to the global average, Asia Pacific consumers plan to save, invest and spend more

Asia Pacific

How to utilize spare cash after covering essential living expenses

Global Average


Latin America reports mixed results In Latin America, Brazil recorded the highest consumer confidence in the region with an index of 112—the fifth highest score of 56 countries measured. Confidence rose five points in Colombia and Venezuela, fell in Peru (-4), Mexico (-2), and Argentina (-1) and remained flat in Chile. Latin Americans are the most confident in regards to personal finances in 2012 with 66 percent describing their outlook as good/excellent for the coming year.

“Brazil continues to experience gradual economic growth with a dip in unemployment, inflation control, an expansion of credit and political stability”, said Eduardo Ragasol, Managing Director, Nielsen Brazil. “More Brazilians today have the opportunity to buy products that were previously only accessible to the higher social classes, which is contributing to the optimism in the country.”

“Positive economic results are driving Colombia’s increased consumer confidence,” said Felipe Urdaneta, Country Manager, Nielsen Colombia. “Gross Domestic Product (GDP) growth is up 7.7 percent in third quarter—the highest in last five years, unemployment is going down for the third consecutive month and Nielsen fast-moving consumer goods unit sales increased five percent last quarter.”


In Latin America, at-home entertainment takes preference over going out

Actions this year

Money-saving tactics for groceries, telephone expenses and electricity will continue

Will continue next year

18%

50%

33%

13%

37%

39%

46%

45%

38%

25%

24%

19%

29%

36%

6%

13%21%

5%

16%

19%

11%

15%

26%

32%

36%

15%

7%

14%

13%

9%

12%

5%

Use My Car Less Often

Cut Down on At-home Entertainment

Cut Down on Out-of-Home Entertainment

Cut Down on Take-Away Meals

Cut Down on Smoking

Spend Less on New Clothes

Switch to Cheaper Grocery Brands

Cut Down on Telephone Expenses

Cut Down/Buy Cheaper Brands of Alcohol

Look for Better Deals on Loans, Credit Cards, etc

Delay Replacement of Major Household Items

Delay Upgrading Technology, e.g. Pc, Mobile, Etc

I Have Taken Other Actions Not Listed Above

Try to Save on Gas and Electricity

Cut Down on Holidays/Short Breaks

Cut Out Annual Vacation


Job security is a top concern in Middle East / AfricaIn the six Middle East/African markets covered by the Nielsen survey, confidence rose in Pakistan (+3), fell in Saudi Arabia (-7), Egypt (-5), Israel (-1), and remained flat in United Arab Emirates and South Africa. The top concern for one in five consumers in the Middle East/Africa is job security—five points higher than the global average. Worries over political stability and the economy are two other top concerns among 12 percent of respondents each.

“Political turmoil in the Middle East and doubts towards future oil demand, which is indispensible for the Saudi economy, and subsequent austerity measures has led to depressed consumer sentiments in Saudi Arabia,” said Arslan Ashraf, Managing Director, Nielsen Saudi Arabia. “However, through hefty stimulus packages, the Saudi government is making efforts to insulate the economy from these global and regional developments.”

“Egypt’s turbulent political year in 2011, led to rising food prices and a slide in foreign reserves as tourism and export businesses suffered from the dramatic current events,” said Ram Mohan Rao, Managing Director, Nielsen Egypt. “Hopes and fears among Egyptians will prevail in 2012 as elections for a new civilian president will be in June 2012.”

JOB SECURITY


Job security is a top concern among one in five consumers in the Middle East/Africa

BIGGESTCONCERN

THE ECONOMY

POLITICAL STABILITY

INCREASING FOOD PRICES

CHILDRENS’ EDUCATIONAND/OR WELFARE

PARENTS’ WELFAREAND HAPPINESS

WORK/LIFE BALANCE

DEBT

TERRORISM

CRIME

20%

12%

12%

6%

6%

5%

5%

5%

4%

4%


For more information visit www.nielsen.com

Country abbreviations: Argentina ARAustralia AUAustria ATBelgium BEBrazil BRCanada CAChina CNChile CLColombia COCroatia HRCzech Republic CZDenmark DKEgypt EGEstonia EEFinland FIFrance FRGermany DEGreece GRHong Kong HKHungary HUIndia INIndonesia IDIreland IE

Israel ILItaly IT Japan JPLatvia LVLithuania LTMalaysia MYMexico MXNetherlands NLNew Zealand NZNorway NOPakistan PKPeru PEPhilippines PHPoland PLPortugal PTRomania RORussia RUSaudi Arabia SASingapore SGSouth Africa SASouth Korea KOSpain ESSweden SE

About the Nielsen Global Survey

The Nielsen Global Survey was conducted between November 23 and December 9, 2011 and polled more than 28,000 online consumers in 56 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 Nielsen Global Survey, which includes the Global Consumer Confidence Index, was established in 2005.

About Nielsen

Nielsen Holdings N.V. (NYSE: NLSN) is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and related properties. Nielsen has a presence in approximately 100 countries, with headquarters in New York, USA and Diemen, the Netherlands. For more information, visit www.nielsen.com.

Switzerland CHTaiwan TWThailand THTurkey TRUnited Arab Emirates AEGreat Britain GBUkraine UAUnited States USVenezuela VEVietnam VN

Region abbreviations:AP Asia PacificEU EuropeLA Latin AmericaMEAP Middle East, Africa, PakistanNA North America

Copyright © 2012 The Nielsen Company. All rights reserved. Nielsen and the Nielsen logo are trademarks or registered trademarks of CZT/ACN Trademarks, L.L.C. Other product and service

names are trademarks or registered trademarks of their respective companies. 11/3988

Nielsen Global Consumer Confidence Q4 2011

Technology

Transcript of Nielsen Global Consumer Confidence Q4 2011