CONSUMER CONFIDENC E - Nielsen · 2019-05-29 · The Nielsen survey traditionally asks if this is a...

1CONSUMER CONFIDENCE: A CANADIAN PERSPECTIVE – Q3 2013 Copyright © 2013 The Nielsen Company

CONSUMER CONFIDENCEA CANADIAN PERSPECTIVE Q3 2013

2 CONSUMER CONFIDENCE: A CANADIAN PERSPECTIVE – Q3 2013

CONFIDENCE TREADS WATER, AS DEBT CONCERNS RISEWhile consumer optimism is up in the U.S. and some key markets in

Western Europe in the third quarter of 2013, the confidence level in

Canada continues to remain stuck in neutral.

The Nielsen Global Consumer Confidence Index measures views about

job prospects, personal finances and the ability and willingness to spend.

These economic indicators are captured in a consumer confidence level.

Canada’s confidence level stands at 97, a drop of one index point from the

last Nielsen survey. Notably, that is now below the confidence level in the

U.S., which is 98 – their highest level in six year, and near pre-recession

levels.

“Consumer sentiment has increased steadily in the U.S. over the past year,

but it’s been much more volatile in Canada – up for a few quarters then

down for each of the last two quarters,” says Carman Allison, director,

Shopper Insights, Nielsen Canada. “We’re seeing increasing concerns

about debt, with consumers generally saving more than spending.”

In the Nielsen survey, a score of 100 is considered neutral. Levels above

and below show degrees of optimism and pessimism.

Globally, the confidence level stands at 94, the same as in Q2. At the

beginning of 2013, consumer sentiment in Canada was much more

positive – five index points higher than now, and nine index points above

the global average. Relative to the rest of the world, confidence in Canada

is falling fast this year; in Q3, the spread narrowed to just three points.

NIELSEN CONSUMER

CONFIDENCE INDEXCANADA GLOBAL

Q3 2013 97 94

Q2 2013 98 94

Q1 2013 102 93

Q4 2012 100 91

Q3 2012 94 92


LITTLE MOVEMENT IN FEELINGS ABOUT ECONOMIC PROSPECTS The lukewarm consumer confidence is reflected in Canadian perceptions

about their finances and jobs. In both areas, the status quo reigns, with

minimal or no movement.

Precisely half of Canadians consider their finances be good, down

slightly from 51% in the Q2 survey (both are down significantly from

60% in the first Nielsen survey of 2013).

Canadians also have no more or less confidence about the job situation

than they have had all year. The percentage who rate job prospects as

good or excellent was 50% in Q3, 51% in Q2 and 50% in Q1.

3Copyright © 2013 The Nielsen Company

HOW DO YOU RATE

JOB PROSPECTS?

CANADA Q1

2013

CANADA Q2

2013

CANADA Q3

2013

Excellent 4% 4% 4%

Good 46% 47% 46%

Not good 38% 34% 37%

Bad 5% 7% 7%

Just like the attitudes of Canadians towards jobs, the unemployment rate

in Canada has also been holding relatively steady. At the beginning of

2013, the unemployment rate was 7%. It was 7.1% in August (when the

Q3 consumer confidence survey started) and 6.9% in September (when

the survey concluded), and was 6.9% again in October 2013.

Yet as Allison notes, different segments of the population are facing

very different job situations. “The unemployment rate for the 15-25

group is about twice the national average. We also see than more than

4 in 10 Canadians in their 20s still live at home,” says Allison. “So

unemployment is plaguing the new consumer in particular.”


RECESSION FEARS REMAIN HARD TO SHED–AND SPENDING TAKES A HIT When it comes to spending that will spur the economy, “consumer

perception is our reality,” reminds Allison. So while the recession

officially ended in Canada more than four years ago, 47% of Canadians

still feel that we are in a recession today – and of those, half feel the

country will still be in a recession a year from now. “Is this the new

normal?”

GOOD

BAD

DO YOU THINK YOUR COUNTRY IS IN AN ECONOMIC RECESSION AT THE MOMENT? (% ANSWERING YES)

Q1 2013

Q2 2013

Q3 2013

CANADA

47%

47%

49%


How do the prevailing attitudes of Canadians, towards personal finances,

jobs and the overall economy, translate into spending or savings habits?

The Nielsen survey traditionally asks if this is a good time to buy the

things you need and want, considering current costs and your personal

finances. The answer has become increasingly negative through the year.

In Q1, 54% said it’s a bad or not good time, and 44% said it’s a good

or excellent time, a 10-point difference. In Q2, that gap widened to 54%

negative and 42% positive (12-point difference). Now, in Q3, 55% say it’s

not the right time to buy, and 41% say it is (14-point difference).

IS THIS A GOOD OR BAD TIME TO BUY?CANADA

Q1 20133%

3%

3%

41%

41%

12%

15%

14%

42%

39%

39%

38%

Q2 2013

Q3 2013

EXCELLENT

GOOD

NOT GOOD

BAD

Q1 2013

Q1 2013

Q1 2013

Q2 2013

Q2 2013

Q2 2013

Q3 2013

Q3 2013

Q3 2013


MORE SAVING THAN SPENDING Given the halfhearted mood to spend, it’s not surprising to learn what Canadians do with their spare cash, i.e. after they have covered their essential living expenses. The top savings strategies have much more support than the spending strategies, and are holding steady compared to the previous Nielsen survey. In contrast, spending is up in two key categories, but down in three others.

WHAT DO YOU DO WITH YOUR SPARE CASH?

SPENDINGSTRATEGIES

Out-of-home entertainment

New clothes

New technology products

Home improvements/decorating

Holidays/vacations

19%

22%23%

21%

14%15%

17%

20%22%

19%

25%

42%38%

37%

40%38%38%

14%

Q1 2013Q2 2013Q3 2013

10%11%

18%15%15%

20%28%

19%

29%26%

15%20%

Paying off debts/ credit cards/loans

Putting into savings

Investing in shares of stock/mutual funds

Retirement fund

I have no spare cash

SAVINGSTRATEGIES


“The savings strategies are understandable when you consider that the

household balance sheet for most Canadians is not improving,” says Allison.

“The average income may be up in Canada, the debt-to-income ratio is going

up even higher. It appears as if that will continue to rein in spending. We are

seeing slow growth in a number of consumer categories, and even that is

driven largely by inflation in many cases.”


FRUGAL HABITS RISE Canadians are still looking for ways to reduce their spending to save

on household expenses – 59% say they have changed their shopping

patterns compared to this time last year.

Nielsen asks consumers about 15 savings habits. In nine, the percentage

of Canadians who are cutting back is up. That is a big reversal from the

Q2 survey, where the cutting back was down in nine categories.

Here are the 15 saving strategies measured, with the percentage change

from the Q2 2013 Nielsen survey in parentheses.

Cut down on take-away meals: 56% (+3)Cut down on out-of-home entertainment: 54% (+4)Spend less on new clothes: 54% (+3)Try to save on gas and electricity: 51% (+3)Switch to cheaper grocery brands: 48% (+6)Cut down on holidays/short breaks: 38% (+5)Use my car less often: 36% (+8)Delay upgrading technology (PC, mobile, etc.): 32% (-1)Cut out annual vacation: 29% (-2)Cut down on telephone expenses: 27% (+1)Delay replacing major household items: 27% (-2)Cut down on at-home entertainment: 26% (+3)Look for better deals on home loans, insurance, credit cards, etc.: 21% (same)Cut down on or buy cheaper brands of alcohol: 15% (-6)Cut down on smoking: 10% (-4)


DEBT AND HEALTH TOP WORRIES Debt remains the number one concern of Canadians, and that worry

has gone up since the last quarter. Job security is the next biggest

#1 concern, though when you factor in the #2 choice more Canadians

overall put health and the economy as a concern.

Here are the seven issues that Canadians expect to weigh most heavily

on their minds over the next six months. The numbers in parentheses

notes the percentage change from the Q2 Nielsen survey; (/) indicates

no change.

“History looks to be repeating itself. As we head into the key shopping

season, consumer volatility remains. We can expect consumers to be

spending cautiously and taking advantage of deals and promotions –

basically more of the same behaviour” says Allison.

WHAT IS YOUR BIGGEST

CONCERN OVER THE NEXT

SIX MONTHS?

#1

CONCERN

#2

CONCERNTOTAL

Debt 16% 11% 27% (+3)

Health 12% 10% 22% (+2)

The economy 11% 11% 22% (-2)

Job security 14% 6% 20% (/)

Increasing food prices 6% 12% 18% (+1)

Increasing utility bills 6% 8% 14% (-1)

Work-life balance 6% 8% 14% (+1)

CONSUMER CONFIDENCE: A CANADIAN PERSPECTIVE – Q3 2013

ABOUT THE SURVEY The Nielsen Global Online Survey was conducted between August 14

and September 6, 2013, and polled more than 30,000 consumers

online in 60 countries throughout Asia-Pacific, Europe, Latin America,

the Middle East, Africa and North America. The sample has quotas

based on age and sex for each country based on their Internet users,

and is weighted to be representative of Internet consumers and has a

maximum margin of error of ±0.6%.

This Nielsen survey is based on the behavior of respondents with online

access only. Internet penetration rates vary by country. Nielsen uses a

minimum reporting standard of 60 percent Internet penetration or 10M

online population for survey inclusion. The China Consumer Confidence

Index is compiled from a separate mixed methodology survey among

3,500 respondents in China. The Nielsen Global Survey, which includes

the Global Consumer Confidence and Spending Intentions Survey, was

established in 2005.

ABOUT NIELSEN Nielsen Holdings N.V. (NYSE: NLSN) is a global information and

measurement company with leading market positions in marketing

and consumer information, television and other media measurement,

online intelligence and mobile measurement. Nielsen has a presence in

approximately 100 countries, with headquarters in New York, USA and

Diemen, the Netherlands.

For more information, visit www.nielsen.com.

Copyright © 2013 The Nielsen Company. All rights reserved. Nielsen and

the Nielsen logo are trademarks or registered trademarks of CZT/ACN

Trademarks, L.L.C. Other product and service names are trademarks or

registered trademarks of their respective companies. 13/7211

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