Confidence dips globally – consumers cautious about a 2008 Recession.

Hong Kong- Rising oil prices, the spread of the sub-prime credit issue in international markets, and the slow down in the US economy are all taking their toll on the confidence of the world’s consumers. According to the latest Global Consumer Confidence Study conducted by The Nielsen Company, more than a quarter of global consumers expect a global recession in 2008, resulting in a dip in confidence in 21 of the 48 markets Nielsen surveyed.

Thailand, Taiwan and Italy lead the pack with most people anticipating a global recession in the next 12 months. Globally, over 50 percent of people are concerned that a recession will lead to Unemployment and Inflation. At the other end of the scale, 40 percent of the world’s consumers do not believe there will be a global recession next year, led by two of the fastest developing countries – China (69%) and Vietnam (66%).

“In the world’s leading economy of the US, consumer confidence has seen a continual decline from late 2006 on the back of a number of negative economic indicators such as the anticipated economic slowdown, the weak Dollar, rising oil prices and the sub-prime issue creating increased debt for consumers,” said Bienvenido Niles, President, ACNielsen, The Nielsen Company, Asia Pacific. “The unfavorable economic environment in the US is clearly having an impact on economies in the rest of the world, resulting in less upbeat consumer sentiment elsewhere.”

Established in 2005, the Nielsen Global Consumer Confidence Index shows a continuing decline in global consumer confidence, with an Index of 94 in the second half of 2007, down from 97 in May 2007, and 99 in the same period of 2006.

The Nielsen Consumer Confidence Index – Top 10 Ranking

Globally, Norway superseded India as the world’s most optimistic market with a CI score of 135, up two points from the May survey. India ranked second at 133, representing a dip for the third consecutive round since its peak score of 137 in late 2006. Scoring 124 this time round, Denmark ranked a distant third, a position it has maintained for the past three rounds of the survey.

In addition to India, Asia Pacific markets including Indonesia, Australia, Hong Kong, Vietnam, New Zealand and Singapore were all among the world’s top 10 most optimistic – with Indonesia, Australia and Singapore in particular registering an increase in consumer confidence levels – making Asia Pacific the most optimistic region worldwide.

As another indication of belt-tightening, 13 percent of global consumers said they had no spare cash after covering basic living expenses; and nearly two thirds think that it is not a good time to spend on things they want, putting holiday spending in doubt for the upcoming festive season .

“Consumers around the world are cautious about spending – of the 48 markets surveyed, 26 recorded a continuing decline in their readiness to spend, compared to six months ago – an important signal for retailers who will need to put in extra effort to entice consumers to loosen their purse strings with the festive seasons of Christmas and New Year fast approaching,” added Mr Niles.

Across Asia Pacific, South Koreans, Taiwanese and Japanese are among the most cautious about discretionary spending, with around eight in 10 thinking now isn’t a good time to buy the things they want, in stark contrast to Hong Kong and India, where over 60 percent are optimistic about spending in the next 12 months.

Major Concerns

Irrespective of a global recession, consumers continue to worry most about the Economy (47%), Health (37%) and Job Security (30%) in the six months ahead.

Taiwan (74%) tops the world with most people concerned about the state of the Economy in the next six months, followed by people in China (71%). In fact, seven of the top 10 markets most concerned about the Economy hail from Asia Pacific.

Among the Asia Pacific markets, people in China (63%), Hong Kong (49%) and Vietnam (48%) were most concerned about their health; while Vietnam (58%), South Korea (54%) and the Philippines (47%) ranked among the world’s top 10 most concerned about Job Security in the next six months.

The Least Optimistic

The world’s most pessimistic consumers hail mainly from Europe, although South Korea (54). Japan (59) and Taiwan (69) remain at the bottom of the list as far as the Asia region is concerned. Indeed, the situation in Japan and Taiwan continues to snow-ball, with consumers’ confidence levels further deteriorating from the beginning of the year.

For more information at http://www.nielsen.com