Global consumer confidence dips; India most optimistic says Nielsen

Reuters: Global consumer confidence dipped at the end of last year, a survey showed on Monday, and more than 60% of respondents said the next 12 months would not be a good time to spend.

India remained the most optimistic consumer market globally for a second straight quarter, followed by the Philippines, Indonesia and Thailand.

Concerns about US budget talks, which have since eased, and worries about the euro zone crisis weighed on consumer sentiment in the final quarter of 2012, according to the survey by global information and insights company Nielsen.

63% of respondents said it was not a good time to buy discretionary or non-discretionary things over the next 12 months, with spending restraint most notable among Europeans. Consumers in the Asia Pacific were most upbeat but even there 59% said the next 12 months would not be a good time to spend, the survey showed.

The Nielsen Global Consumer Confidence Index dipped 1 point in the fourth quarter to 91, after rising 1 point in the third quarter, and was 2 points higher than a year earlier. A reading below 100 signals consumers are pessimistic about the outlook. Only 10 of the 58 markets surveyed reported a reading above 100.

Confidence was worst in euro zone countries grappling with debt problems, notably Greece, where consumer sentiment fell sharply in the fourth quarter from the previous three months.

“With continuing uncertainty concerning the United States debt ceiling and mandated spending cuts, along with as-yet tentative signs of economic stabilisation in Europe, we can expect continued caution and moderate growth in the first quarter of 2013,” said Venkatesh Bala, chief economist at The Cambridge Group, a part of Nielsen.

“The major downside risk continues to be in Europe, where policy missteps within the European Union or within individual countries could damage fragile consumer confidence and take hold globally.”

Confidence in China edged up slightly while Norway was the only developed market to be ranked among the top 10 most optimistic consumer markets globally. In the United States, confidence dipped slightly between the third and fourth quarters but job prospects improved.

Since the survey was conducted US lawmakers have reached a deal to avoid automatic tax rises and spending cuts, although they face more showdowns over fiscal measures in coming months, and economic data has pointed to a sluggish recovery. “North America is slowly, but steadily heading in the right direction,” said Bala. “With continued weakness in Europe and uneven growth in Asia, it may well be that with a brighter job market, the United States serves as the critical engine of improved global economic activity in 2013.”

The US economy unexpectedly contracted in the fourth quarter of 2012 but has got off to an encouraging start this year with manufacturing growing at the fastest pace in nine months in January and employment rising modestly.

The Nielsen survey was conducted from 10-27 November 2012 and covered more than 29,000 online consumers across 58 markets.