Nielsen Consumer Confidence survey results out; India tops!

What is the degree of your optimism about the overall state of the economy? How confident are you about the stability of your household income? Quite high, and, very, are respective answers to the above questions, by the looks of it. India has done exceedingly well in the latest edition of Nielsen Global Consumer Confidence Index, rebounded to reach its highest level since the third quarter of 2007, providing the most definitive sign that India is fast recovering from the economic downturn.

Now, just for a moment, let us try to lay down a basic functioning structure of a Consumer Confidence survey. If consumer confidence is higher, consumers boost the economic expansion of a country by doing more purchases. However, if confidence is lower, consumers tend to save more than they spend, prompting the contraction of the economy.

Last year's Consumer Confidence report looked promising after a gloomy days of recession. "The BRIC and Asian markets have recorded the greatest jumps in Consumer Confidence Indices in the past three months. Consumer confidence in India jumped 13 Index points, and climbed 9 points in Japan, South Korea, Hong Kong and Indonesia. Consumer confidence rose 8 Index points in Taiwan and Brazil, and 7 points in Singapore, Turkey, Russia, Philippines and the UK. The only exceptions to this upswing were in the USA and New Zealand, which held flat in the second quarter, with Germany the only country to register a decline of one Index point," Jonathan Banks, Business Insights Director, The Nielsen Company was quoted as saying.

Reports even prior to this show Indonesia, Denmark and India as world's most confident countries in terms of Global Consumer Confidence index.

The world's most pessimistic nations in the Nielsen Index have traditionally been South Korea, followed by Japan and Portugal and Latvia.

According to the Nielsen survey of 2009 (1st half), 77 percent of online consumers said their economy is in recession. It was observed that consumers experienced a grim end to 2008. The one exception globally was China where 65 percent of internet consumers thought their economy not in a state of recession.

At the time, the biggest global concern was towards the economy, job security, work/life balance and debt.

This year though, things are different; things are a bit better. With 127 index points, India ranked number one in the recent round of the survey, followed by Indonesia (116) and Norway (115). Nielsen sampled more than 27,000 Internet users in 55 countries to file in this report.

Interestingly, 41 of the 55 countries surveyed during the quarter showed a rise in consumer confidence. The global index up as consumers started spending again to this degree. The index experienced a gain and stood at 92 points (100 = average) in the first quarter. This represents a six point increase from six months ago and only two points short of the 94 point index mark in Q3 2007. Consumer confidence hit an all time low of 77 index points in early 2009, following global economic meltdown.

"The rising confidence index shows a rebounding faith in economy and hope for a more optimistic future. India is one of the fastest growing markets in the world and the current consumer belief that recession would soon be a thing of the past has filled Indians with confidence," said Piyush Mathur, Managing Director - South Asia, The Nielsen Company.

68 percent Indian consumers believe that the country will be out of recession in the next twelve months, making India the most optimistic country globally who believe that recession will be a thing of the past in a year's time. 48 percent respondents maintain that the country is still under recession.

Lithuania (46), Croatia (48), and Portugal (51) were the most pessimistic nations. Taiwan (+14 pts), Singapore (+11), Israel (+10) and Colombia (+9) were among the highest increases in consumer confidence in Q1, while Greece (-15), in the midst of a financial collapse, recorded the steepest decline.

India stood firm on number one spot with 91 percent votes as the most optimistic country where job prospects are concerned. 25 percent Indians think that job prospects in the country will be 'excellent' and 66 percent think that it will be 'good' in the next twelve months. The country coming second is Singapore. The gap between India and Singapore is almost 15 percent in its optimism about job prospects.

In the latest round they have emerged the most optimistic with 84 percent votes. Indians are followed by Indonesia (77%) in their optimism about the state of their personal finances in the next twelve months.

Optimism in job prospects and personal finances is reflecting in Indian's willingness to spend. India is the third most optimistic country which thinks that it is an opportune time to buy the things that they want and need considering the cost of things today and their state of personal finances.

More than half the Indian consumers (52%) believe so. 8 percent Indians think that it is an 'excellent' time to buy the things that they want and need and 44 percent think that it is a 'good' time to make purchases.

"Indian job market is opening up, which also means that finances are improving with better jobs, and more people now have the power to spend on discretionary items. So it's not a surprise that Indians think that the time is ripe to spend on things they desire," said Mathur.

As the signs of recession are going down, more Indians are taking to the shops. There is also an increased interest in investing in shares of stock and mutual funds. About 43 percent Indians put their spare cash into stocks ' this is the fourth highest percentage globally for a country to invest its spare cash in the stock market. The Chinese are the most daring when it comes to investing in the stock market with more than half the consumers (52%) investing in shares and mutual funds.

After saving and investing, Indians like to spend their spare cash on Holidays/ vacations (38%). This takes the third spot on the spending list of Indians pushing down buying new technology products (35%) to fourth spot in the last round of the survey. However, Indians still rank sixth in their willingness to buy new technology products.

Other areas where Indians love to spend their spare cash are on New clothes and Home improvements/ decorating (both 32%), Paying off debts (29%), Out of home entertainment (23%), and Retirement fund (22%).

"Old habits die hard, and Savings seems to be one of them. But who is complaining, it did help to wade us out of the recent economic downturn. Having said that, we see a lot more investment by Indians on the stock market and in personal activities like holidays, etc, which is a sign of a recovering economy and more importantly a recovering consumer mindset more attuned to making purchases than hoarding up available resources in fear of a gloomy future," said Mathur.

Increasing food prices, which has beaten all other concerns and came out as the biggest concern (17%) for Indians in the first quarter of 2010. In fact India tops all other countries where increasing food prices are concerned.

Work/ life balance (11%) is the second biggest concern for Indians. Surprisingly, Global warming is the next biggest concern here, with 10 percent Indians considering it the third biggest concern in the latest leg of the survey. India also tops all countries surveyed in its concern for global warming. For Indians Job security (9%) comes only after global warming in their list of biggest concerns.

History stands as a proof that terrorism has always surrounded India and it is Terrorism, followed by Health, and Children's education and/or welfare (all 7%) that concerns Indian population.

Concern over Economy has gone down to 6 percent. A similar concern is shown over Parent's welfare and happiness (6%), fourth highest globally. With 5 percent votes increasing fuel prices come next, this is also the third highest percentage globally for increasing fuel prices. Debt and increasing utility bills follow with 3 percent votes each. Political stability is a concern bothering 2 percent Indians and a meagre 1 percent Indians are bothered about Crime and Tolerance towards other countries values.

"In India food accounts for a major portion of the household expenditure, thus rising food prices is becoming a major snare for Indians. When it's not the pressure of increasing prices that bother Indians then it's global warming, which has become a prominent concern lately. The changing weather conditions has made Indians fear the predicted end if things like deforestation, industrialization without proper planning, etc. continue as they have been going on for so many years," said Mathur.