New York City Global consumer confidence in first quarter 2010 rebounded to reach its highest level since third quarter 2007, providing the most definitive sign that the world is beginning to recover from the recession, according to the latest edition of the Nielsen Global Consumer Confidence Index. As the world’s consumers started to spend again, they drove the global index up to 92 points (100 = average) in the first quarter. This represents a six-point increase from six months ago, and only two points short of the 94 point index mark in third quarter 2007, just prior to the decline into world recession. Consumer confidence hit an all-time low of 77 index points in early 2009, following the collapse of the international financial system, before steadily increasing again last year.
Consumer confidence rose in 41 of the 55 countries surveyed during the quarter, with India (127 index points), Indonesia (116), and Norway (115) remaining the world’s most confident nations. Meanwhile, Lithuania (46), Croatia (48), and Portugal (51) were the most pessimistic nations. Taiwan (+14 pts), Singapore (+11), Israel (+10), Mexico (+10) and Colombia (+9) were among the highest increases in consumer confidence in the first quarter, while Greece (-15), in the midst of a financial collapse, recorded the steepest decline.
“For the first time in two years, Nielsen’s global consumer data provides evidence that economic prospects are improving -- a sign manufacturers and retailers have been eagerly waiting for that consumer spending intentions are turning into actual spending reality,” said Dr. Venkatesh Bala, chief economist at The Cambridge Group, a part of The Nielsen Co.
The survey revealed that the pace and extent of economic recovery has widened between the booming Asia Pacific and Latin American countries compared with the sluggish recovery in the United States and western Europe.
“Asia Pacific consumers -- who were among the first to cut back drastically on discretionary spending 18 months ago -- are now confident enough to spend their way into higher growth,” said Dr. Bala.
Likewise, in Latin America, while consumers have been cutting back spending on discretionary items, the FMCG industry has been gradually recovering as consumers increase spending on essential goods, according to Nielsen data. In addition, expected GDP growth and lower inflation has renewed optimism in most of the region’s countries.
“In contrast, the United States and Europe are likely to see a period of slow demand growth in conjunction with a largely jobless recovery in the United States, and in the case of Europe, added uncertainty from the ongoing sovereign-debt crisis,” said Dr. Bala. “Due to consumers’ limited household spending, uncovering new areas of growth will be important for retailers. Consumer product companies will require a high degree of precision in targeting, value propositions and pricing in order to generate topline growth and profitability.”