Low global consumer economic confidence and a lack of discretionary income threaten the likelihood of an economic recovery in the near future, according to new quarterly data from The Nielsen Company.
Consumer Confidence Drops
After an upbeat start to the year with two consecutive quarters of increased optimism, global consumer confidence fell three points in September to an Index score of 90, according to the Q3 2010 edition of the Nielsen Global Consumer Confidence Index.
Consumer Confidence Index levels above and below a baseline of 100 indicate degrees of optimism and pessimism. The 90 Index mark reflects that consumers around the world are largely pessimistic about job prospects, personal finances and their ability to buy the things they want and need during the next year.
To further illustrate consumer economic pessimism, more than half (56%) of global consumers believe they are currently in recession and 48% do not believe they will be out of a recession in the next 12 months.
Close to Half of Global Consumers Put Spare Cash into Savings
The most popular destination for spare cash (left after covering essential living expenses) for global consumers in Q3 2010 was savings, with 47% indicating they would put spare cash toward savings. Other popular uses for spare cash (more than one response was permitted) included holidays/vacations (34%), new clothes (31%), and paying off debts/credit cards loans (30%).
Interestingly, the only response to show any increase in popularity from Q2 2010 was paying off debts, which rose marginally from 29%. Most notably among uses declining in popularity, holidays/vacations as a use for spare cash declined from 37% to 33% popularity (although it still ranked as the second-most popular spare cash use), and new technology products dropped from 28% to 24%.
Discretionary Income Hits Historic Lows
Discretionary income reached an all-time low for many global consumers in Q3 2010, with 27% of Americans, 19% of Europeans, 17% of Middle Easterners/Africans and 16% of Latin Americans left with no spare cash after paying essential living expenses.
Economy, Health Worry North Americans
The economy remains the number one concern for more than one in four North Americans (27%) and worries about health jumped five percentage points. Health is now the number one concern for 10% of respondents in North America. Among Latin American consumers, consumers ranked work/life balance, job security, debt, crime and children’s education ahead of the economy as the number one concern.
Meanwhile, in Europe, increasing utility bills replaced the economy as the number one concern for the next six months and in Asia Pacific, one in five consumers are most concerned about rising food prices; an increase of 13 points from 7% in Q2 2010.
Economy Leading Source of US Anger
When given a list of current issues that make some people angry, 63% of US adults said they are angry about the economy, according to a new BBC World News America/Harris Poll. This barely beat the 62% of respondents who said they are angry about the government in general and about unemployment.
Other things that majorities are very or somewhat angry about are taxes (58%), immigration (56%), education (51%) and big business (52%). Fewer people are angry about same sex and gay rights (33%), the environment and energy issues (47%) and foreign policy (48%).
About the Data: Nielsen’s Global Consumer Confidence Index tracks consumer confidence, major concerns and spending intentions among more than 26,000 Internet users in 53 countries. The latest round of the survey was conducted between September 3-21, 2010.