Bangkok--12 May--NIELSEN
No Further Significant Decline in Consumer Confidence in USA The Economy-Number One Concern for Thais
Thai consumer confidence has plummeted to a record new low in the past six months, falling eight Index points down from 89 to 81 according to the latest twice-yearly Nielsen Global Consumer Confidence Index which tracks consumer confidence, major concerns and spending habits among 25,140 internet users in 50 countries.
The latest Nielsen Global Consumer Confidence Survey, conducted 19 March — 2 April 2009, found that Thai consumers’ confidence fell from 89 to 81, its lowest in the last four years while globally, the Nielsen Confidence Index has also recorded a new low, dropping from 84 to 77 this time round. Confidence fell in 48 out of 49 countries[1] — Taiwan was the only country to buck the global trend, edging up three Index points from 60 to 63 although still 14 points below the global average.
Indonesia topped Nielsen’s Global Consumer Confidence Index at 104 points, followed by Denmark (102 points) and India (99 points). The world’s most pessimistic nations in the Nielsen Index are South Korea (31 points), followed by Japan (42 points) Portugal and Latvia at 48 Index points.
“Global consumers have been battered and bruised by a constant onslaught of bad news in the last six months,” said Chantira Luesakul, Managing Director, Nielsen Thailand. “Daily announcements of job cuts and company profit warnings, bankruptcies and foreclosures, lowered GDP expectations and depressed manufacturing and production forecasts have combined to reduced consumer confidence and spending power to their lowest levels in post-war years”
According to the Nielsen survey, 91 percent of online Thai consumers think their economy is in recession, compared to 80 percent who thought so six months ago. 44 percent of them don’t believe the country will be out of the economic recession, while a more optimistic 24 percent see a recovery coming in the next 12 months.
In the last six month, consumer confidence in the regions of Middle East/Africa and North America both declined by two and three index points respectively. However, no significant further decline in North American consumer confidence may signal the first cautious signs of hope that the recession is finally bottoming out.
“The results we are seeing in the latest Nielsen Consumer Confidence Index indicate that we may be at, or at least very near, a bottom in this economic cycle. Specifically in the United States, while clearly adjusting their spending and savings with 40 percent stating they are paying off debts and putting into savings, American consumers are increasingly optimistic about a light at the end of the tunnel, with close to 20 percent seeing a recovery in the next 12 months,“ commented Luesakul.
Thai were pessimistic over local job prospects
82 percent of Thai consumers believed that the job prospects over the next 12 months would be “not so good (61%) and bad (21%)”. In Asia Pacific, Korean consumers (75%) and Japanese consumers (60%) described their job prospect in the next 12 months as “bad “
Spending Intentions
The Nielsen survey also found that 55 percent of Thai consumers are not confident with the state of their personal finances over the next year and 66 percent consider it “not so good or a bad time” to buy things they want over the next 12 months. When it comes to their intention to spend spare cash, “Saving” continue to be the main priority for Thai consumers, with 54 percent saving any left over cash after covering basic living expenses, followed by Holidays/Vacation (46%) and Retirement Funds and Home Improvement/Decoration( same 27%)
“Thailand’s economy has undoubtedly slowed, mainly due to a slackening in international trade, while household consumption remains positive as a result of the government stimulus plan. According to Nielsen Retail Index, total retail sales of consumer goods have shown continuous growth, reaching 7.3 percent in the first quarter of this year - higher than last year. In the midst of economic recession, the FMCG industry maintains strong growth. The current economic downturn is unlikely to negatively impact FMCG businesses yet,” said Luesakul.
The Economy a major concern
While global consumer confidence plummeted to a new low, fears of unemployment and job uncertainly reached new heights. Job security was cited as the leading concern among internet consumers in 31 of 50 countries surveyed. Thai consumers however ranked “The Economy” (36%) as a top concern in life followed by Job Security (17%), Political Stability (10%) and Debt (7%).
How Thais save on household expenses?
According to Nielsen’s survey on consumer recessionary behaviors, Thai consumers will cut back on the following expenses;
Save on Gas& Electricity (59%)Spend less on new cloths (57%)Cut down on out of home entertainment (54%)Cut down on telephone expenses (47%)Delay upgrading technology, eg. PC, Mobile (39%)