Global consumers are increasingly optimistic about the economy, however those in North America remain the exception to the rule.
The Nielsen Global Consumer Confidence Survey, released yesterday, showed an uptick in confidence among 24 of the 28 countries surveyed. Worldwide there was with a five-point increase from a score of 77 in March to 82 in June. But the North American market saw only a modest increase of 0.6, from 80.1 to 80.7.
This is driven by the fact that, 93 percent of North American consumers say the county is still in a recession. The global average is 71 percent.
A quarter of North Americans cited the economy as their biggest concern (compared to 19 percent globally) and were twice as worried about debt than the rest of the world. The global average was 7 percent of respondents. In North America, it was 14 percent.
More than three quarters of North American consumers (76 percent) said they have changed their spending by exercising cost-cutting measures. Still, many expect to start spending in the future.
For example, while 61 percent of North Americans spent less on new clothes in June, only 28 percent expect to continue such restraint. Sixty-six percent of respondents said they cut down on out-of-home entertainment in the last year. However, only 29 percent anticipated continuing to this habit.
“The levels of optimism may return more slowly to the U.S.," said James Russo, vice president of global consumer insights for The Nielsen Company. "Spending will be moderate and restrained, but it’s starting to happen."
While spending will rebound in some areas, others will be impacted for the long term.
Sixty-one percent of North American consumers report switching to private label grocery products. Thirty-seven percent plan to stick with these less expensive grocery brands for the foreseeable future. This is a full 11 percent higher than the global average. "Will the embrace of private labels continue? You’re not going to have the same percentage, but we can see a continued interest in these products,” said Russo.
Gas and electricity will also continue to be an area where consumers will look to save. While 69 percent have cut spending in this area, 60 percent plan to continue keeping costs down. The global average has only 41 percent of respondents expressing the same expectation.
"Everybody is clearly managing their budgets, but we're also seeing what they're planning to do after the recession," said Russo. "They will continue to try to save on gas, electricity and utilities. That's a controllable expense. But they will return to a degree to discretionary spending."