As uncertainties remain elevated, strong confidence levels
may not translate into more spending
- Global Consumer Confidence improved slightly; index remains
at historically high levels
- Overall, 28 out of 64 markets saw improvements in
confidence levels
- Europe sees recovery in
confidence – large improvements in France and Turkey, but UK consumers increasingly face
challenges
- Asia-Pacific benefits from
strong conditions in China,
India and Indonesia
- Latin America sees largest
broad-based decline
NEW YORK, July 3, 2019 /PRNewswire/ -- Consumers across
major global markets – including China, India,
Indonesia, the United States, and Germany – remain confident, according
to The Conference Board® Global Consumer
Confidence Index. Large improvements are seen in several major
economies, including France,
South Korea and Turkey, while confidence waned in Brazil, Canada, Mexico and the United Kingdom. Overall, a
smaller number of markets are seeing further improvements in
confidence. High levels of confidence may therefore not translate
into greater spending in the coming quarters, amid growing economic
and geopolitical uncertainties.
Globally, The Conference Board® Global
Consumer Confidence Index, conducted in collaboration with
Nielsen, increased slightly in the second quarter to 107, up from
106 in the first quarter. The index has been relatively flat in
recent quarters, hovering at historically high levels since late
last year. Consumers are likely to sustain spending, but more
cautiously amid a slowing global economy. Looking ahead, rising
uncertainties related to trade disputes and geopolitical imbalances
may create a more volatile scenario in which consumers will grow
increasingly vigilant regarding their spending.
Improvements Uneven Across Regions
Confidence levels strengthened in several mature and emerging
markets. However, the strengths and weaknesses among the regions
were not as balanced as in Q1. Now, just 28 out of 64 markets saw
an improvement, down from 33 markets in Q1.
"High confidence levels are positive news for businesses in most
regions, as they can be seen as a strong predictor of economic
prospects," said Bart van Ark, Global Chief Economist of The
Conference Board. "However, the slight decline in the number of
markets showing an improvement in confidence reflects rising
uncertainties about global trade, import tariffs, and greater
geopolitical imbalances."
Despite higher tariffs, confidence in China and the U.S. remains high. Latin America, a region with historically low
levels of confidence, experienced a rather large drop in confidence
driven by large declines in Brazil
and Mexico. Increasing job
pessimism amid rising unemployment in Brazil, coupled with continuing economic
policy uncertainties in both Mexico and Brazil, remain impediments for the region.
In Europe, confidence improved
and is back at an all-time high. However, confidence in the UK
declined four points, most likely the result of Brexit and the
ensuing political and economic uncertainties around this event.
Sentiment in the Euro Area also improved, with a notable gain in
France. German consumers are still
relatively optimistic, but this market continues to experience a
softening in confidence, which bears watching over the next several
quarters.
Drivers of Consumer Confidence Remain Strong in Most
Markets
Global optimism about the short-term outlook for the labor
market remains high, with 59 percent of global consumers seeing
good or excellent labor market conditions. However, consumers in
Latin America and the Middle East and Africa are less optimistic about job
prospects, and concerns appear to be growing. Personal financial
expectations remain strong at 63 percent and has increased in all
regions except Latin America. More
consumers also say now is a good time to spend, although
cautiously; the most optimistic reside in North America and Asia.
"While spending intentions have improved in the majority of the
regions in the world, consumers are generally cautious and fiscally
prudent," said van Ark. "This is clearly reflected in the greater
willingness of consumers in most regions to save once they have
taken care of their essential living expenses."
"Consumers appear to be showing some constraint when it comes to
spending on discretionary products and services, such as home
improvement and bigger-ticket items such as new tech products,
although to a lesser degree in Europe and Latin
America," said Denise
Dahlhoff, Senior Researcher, Consumer Research at The
Conference Board. "In Asia Pacific, using disposable money for
out-of-home entertainment has notably dipped in recent quarters. On
the other hand, spending on new clothes has grown, especially in
the Euro Area and Latin America;
the only exception is North
America, where this category has markedly dropped."
Index is Latest Addition to The Conference Board's
Economic Indicators Program
The Global Consumer Confidence Index is a recent addition to The
Conference Board's portfolio of economic indicators, which includes
the Consumer Confidence Index® for the US, The Conference Board
Measure of CEO Confidence™, the Employment Trends Index™, The
Conference Board Help Wanted OnLine® Index, and Leading
Economic Indexes for 12 countries, the Euro Area and globally.
The Global Consumer Confidence Index, based on responses from
32,000 online consumers in 64 markets throughout Asia-Pacific, Europe, Latin
America, the Middle East
and Africa, and North America, was acquired from Nielsen,
which first began the survey in 2005. Nielsen, which is a
leading global provider of information and analytics around what
consumers buy and watch, continues to collaborate with The
Conference Board on conducting the global survey.
The series for the world, the 64 countries covered and regional
aggregates as well as information on several components of the
index, including job prospects, personal finances and spending
intentions, are released on a timely basis in summary format to the
public during the first two weeks of each quarter. Detailed data
series are made available on a complimentary basis to members of
The Conference Board.
Global Regional Highlights for the Second Quarter of
2019
Asia-Pacific - Consumers
in this region remain extremely confident, with China, India
and Indonesia serving as the main
pillars of global confidence. Two of the more mature economies in
the region, Japan and Korea, saw
confidence move in opposite directions – it declined in the former,
while in the latter it improved, both largely due to changes in the
job outlook.
Latin America -
Confidence declined across the region, most notably in Brazil and Mexico. Increasing job pessimism amid rising
unemployment in Brazil, coupled
with continuing economic policy uncertainties in both countries,
are impediments for the region. Only Argentina and Venezuela, countries with extremely
disadvantageous political and economic challenges, saw some
improvement.
Africa and The Middle East - While the
average confidence level in this vast region increased only
marginally, improvements were broad based. Improvements in
Saudi Arabia, South Africa, and Morocco were neutralized by a sharp decline in
Pakistan.
North America -
Confidence in the U.S. remains near historic highs as consumers
have so far shaken off trade and tariff uncertainties. Confidence
levels in Canada, on the other
hand, declined in the latest quarter, likely driven by elevated
household debt conditions and an anemic growth outlook for
2019.
Europe - Consumer
confidence in Europe improved and
is back at historical highs. Sentiment in the Euro Area improved
with a notable gain in France.
Germany continues to experience
some weakening in confidence, even though the index is still at a
relatively high level. Confidence in the UK dropped further and is
now well below 100 —a result of Brexit and the ensuing political
and economic uncertainties around this event.
Source: July 2019 Global
Consumer Confidence Survey
The Conference Board /
Release #6100
About The Conference Board® Global Consumer
Confidence Survey
The Conference Board publishes
the quarterly Global Consumer Confidence Index at 5:00 AM ET. The Conference Board Global Consumer
Confidence release schedule for
2019:
Wednesday, October 09, 2019 (for Q3
2019
data)
The Global Consumer Confidence Index Highlights, full report and
technical notes to this series are available on The Conference
Board website.
About The Conference Board
The Conference Board is the
member-driven think tank that delivers trusted insights for what's
ahead. Founded in 1916, we are a non-partisan, not-for-profit
entity holding 501 (c) (3) tax-exempt status in the United
States.
www.conference-board.org.
About Nielsen
Nielsen Holdings plc (NYSE: NLSN)
is a global performance management company that provides a
comprehensive understanding of what consumers watch and buy.
Nielsen's Watch segment provides media and advertising clients with
Total Audience measurement services for all devices on which
content — video, audio and text — is consumed. The Buy segment
offers consumer packaged goods manufacturers and retailers the
industry's only global view of retail performance measurement. By
integrating information from its Watch and Buy segments and other
data sources, Nielsen also provides its clients with analytics that
help improve performance. Nielsen, an S&P 500 company, has
operations in over 100 countries, covering more than 90 percent of
the world's population. For more information, visit
www.nielsen.com.
Logo -
https://mma.prnewswire.com/media/624268/The_Conference_Board_Logo.jpg