New Zealand Consumer Confidence Index Remains Low Despite Rising Two Points In Q2 2011

The latest findings from Nielsen’s Global Online Consumer Survey for the second quarter of 2011 shows that New Zealand consumer confidence remains relatively low despite increasing two index points compared to the last quarter. In addition Australia consumer confidence fell to its lowest since June 2009.
The Nielsen Global Online Consumer Confidence Survey tracks consumer confidence, major concerns and spending intentions among more than 31,000 Internet consumers across 56 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 20 and June 7, 2011, global online consumer confidence fell three index points from 92 to 89 – its lowest reading since Q4 2009. Confidence in New Zealand rose two index points to 97, while Australia fell seven index points to 103.

While overall confidence levels in New Zealand remain strong relative to the global benchmark, many New Zealand consumers remain cautious, with 46 percent putting spare cash they have into savings and 37 percent channeling surplus cash into paying off debts, credit cards and loans. Many New Zealand consumers said they were: saving on gas and electricity (68%), switching to cheaper grocery brands (67%), cutting down on take-away meals (64%) and cutting back on out-of-home entertainment (61%) to reduce their household expenditure.

The Nielsen survey showed 75 per cent of Kiwis think New Zealand is currently in an economic recession – higher than both the Asia Pacific and global averages (45% and 58% respectively). Twenty seven percent of Australians say they are in a recession at the moment.

More consumers globally are feeling cash strapped as the cost of living and rising food and energy prices continue to squeeze household budgets. Globally, rising food prices are consumer’s top concern, surpassing concerns about the economy for the second quarter in a row.

For New Zealand consumers specifically, increasing food prices remains the number one concern for 28 percent of Kiwi respondents while 26 percent said the economy was a major concern. Other concerns raised by Kiwis included rising utility bills and increasing fuel prices, however the latter has fallen back due to petrol price reductions in recent times.

“There is clearly a continued focus around the globe and in New Zealand to save and reduce household debt,” said Rob Clark, Managing Director, Nielsen New Zealand. “Concerns over job prospects and the state of peoples own finances remain high. Add to this rising food prices, the earthquake and tsunami in Christchurch and Japan, as well as the current financial issues facing Greece, and it’s no surprise that we have not seen a material improvement in consumer confidence.”