JEDDAH – Consumer confidence increased in four of six Middle East/Africa markets, boosting the regional average by six index points in the second quarter, which came after an 11-point regional index decline in the first quarter, Nielsen said in its Global Consumer Confidence report for the second quarter of 2013. Saudi Arabia's consumer confidence increase of four points came after a 12-point index decline reported in the first quarter. “One major development that impacted consumer confidence during Q1 was a new law that made it illegal for export workers to work for any person/ business/institution other than their own sponsors,” said Arslan Ashraf, managing director, Nielsen Saudi Arabia. “However, at the start of April, a three-month grace period was granted, which eased the overall situation a bit in the second quarter. A looming deadline could negatively impact the economy, as it is expected that inflation will increase and service levels will go down.” Pakistan (98) reported the biggest three-month increase of 11 index points, followed by a rise of four points in Saudi Arabia (100), three points in Egypt (77) and South Africa (81). Confidence declines were reported in United Arab Emirates (107) and Israel (83), which declined one and eight points, respectively. “Pakistan's consumer confidence increase was a rebound from a sixpoint decline reported in the first quarter amid tumultuous extremist activity that ensued during that time,” said Mustafa Moosajee, managing director, Nielsen Pakistan. “Yet, the resilience of the Pakistani people, and the capabilities of its large and growing urban middle class is reflected in the steady increase over the previous five quarters and in the latest quarter, which was boosted by a sense of excitement among Pakistani's who participated in landmark national and provincial elections. The historical significance of their vote represented the country's first transition between an elected government fulfilling its term, to another, in a country that has been ruled by the military for more than half of its turbulent history.” While consumer confidence increased across most of the region and those saying they had no spare cash decreased four percentage points to 22 percent, respondents largely did not change their discretionary spending intentions from three months ago, with the exception of two categories. Plans to spend on out-of-home entertainment expenses (21 percent) increased four percentage points from Q1 2013, and intentions to take a holiday/vacation (18 percent) increased five percentage points. 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 respondents with Internet access in 58 countries. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism. In the latest round of the survey, conducted between May 13 and May 31, 2013, consumer confidence rose in 45 percent of global markets measured by Nielsen, compared to 60 percent in the previous quarter. While more than half (55 percent) of global respondents believed they were in a recession in the second quarter, it was the lowest level reported in two years (since Q1 2011). North Americans reported the biggest quarterly recessionary mindset decline of six percentage points to 69 percent, the lowest level since Q3 2007 or before the Great Recession. “The improved recessionary sentiment among North Americans was driven by positive macro-economic developments in the US,” said Dr. Bala. Seventy-two percent of US respondents said they were in a recession—a five percentage point improvement from Q1 and a 15-percentage point change from a five-year average (2008–2012), when 87 percent of Americans said they felt they were in a recession. Concern about the US economy also reported a marked decline of eight percentage points among American respondents in the second quarter, dropping to 19 percent. “There is increasing evidence that the US economy is improving,” said James Russo, senior vice president, Global Consumer Insights, Nielsen. “While the unemployment rate is trending steadily downward to the current 7.6 percent, the biggest drivers of change include the record gains in equity markets and the housing rebound, which are clearly impacting household wealth and spending potential.” Nielsen information showed second-quarter recessionary sentiment declines in Europe which fell two points to 74 percent; and in Asia-Pacific, which declined one percentage point to 40 percent. In Latin America, 56 percent of respondents said they believed they were in a recession, an increase of six percentage points since Q1 2013. — SG
