By Daniel Hunter
In contrast to the majority of European countries, British consumer confidence levels took a hit in the first quarter of 2013 as the number of Britons with no spare cash and the number who believe they’re in a recession increased on the previous quarter- according to the latest figures from Nielsen, a leading global provider of information and insights into what consumers watch and buy.
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 internet consumers in 58 countries.
The number of European respondents who believe their country is in a recession increased by one point to 76 percent — and only 11 percent believe they’ll be out of recession in the next year, the same as in the previous quarter. In comparison, 87 percent of Britons believe they’re in a recession — five percent more than last quarter — and 15 percent believe they’ll be out of it in a year, one percent less than the previous quarter.
The number of European respondents changing their spending habits to save on household expenses dropped significantly from 67 percent to 62 percent in Q1 — its lowest level since Q3 2011. Greeks (93 percent) are the most likely to do this, Germans the least likely (33 percent). This compares to 66 percent of Britons — three percent fewer than last quarter - and 70 percent of French consumers.
The three most popular methods of cost cutting are spending less on new clothes (54 percent), followed by cutting down on out-of-home entertainment activities (53 percent) and trying to save on gas and electricity (52 percent). The numbers switching to cheaper grocery brands to save money dropped from 52 percent to 50 percent. Over half of Britons (58 percent) are switching to cheaper grocery brands compared to 54 percent in France and 66 percent in Germany.
For the second successive quarter, just 21 percent of European respondents report having spare cash once they’ve covered essential living expenses. The number of Britons reporting this increased dramatically from 22 percent to 30 percent; compared to just 18 percent in Germany and 23 percent in France.
Among European respondents with spare cash, one third (34 percent) say they save it — the highest level since Q1 2011 — 30 percent indicate it will go on new clothes, while 29 percent plan to spend it on holidays.
“Despite spare cash levels remaining consistent and saving activity reaching a two year high, European consumers appear less cautious about spending as cost-cutting activity has declined to its lowest level since the third quarter of 2011,” said Nielsen European president Christophe Cambournac. “It remains to be seen if this is simply an initial effort to start the year in a more positive frame of mind or indicative of a continuing and encouraging trend for the year.”
The percentage of Europeans feeling positive about their job prospects increased to 23 percent in Q1 from 22 percent in Q4; in Germany this stands at 48 percent, in the UK 23 percent, Romania 14 percent and in France just six percent. Positivity about personal finances dropped for the second successive quarter, and is now limited to just 35 percent of respondents across Europe. However, 27 percent said now was a good time to buy ‘things wanted and needed’ over the next 12 months — up one point from Q4. This compares to 29 percent in the UK — its lowest level since Q3 2011.
Consumer confidence levels rose in 20 of 29 European countries in the first quarter of 2013, in a complete reversal of the fourth quarter of 2012 in which confidence levels fell in 20 countries.
Despite these increases, European consumer confidence, overall, remained at 71 index points as in the previous quarter. A score below 100 shows general pessimism. Asia Pacific (103) was up two points, North America (94) up four points, Latin America (94) down two points, and the Middle East/Africa (85) down 11 points.
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