consumer confidenc e - nielsen...consumer volatility that still exists, and we’re still not out of...

1CONSUMER CONFIDENCE: A CANADIAN PERSPECTIVE – Q2 2013 Copyright © 2013 The Nielsen Company

CONSUMER CONFIDENCEA CANADIAN PERSPECTIVE Q2 2013

2 CONSUMER CONFIDENCE: A CANADIAN PERSPECTIVE – Q2 2013

CONFIDENCE DIPS IN CANADA, AS SLOW GROWTH CONTINUESWhile consumer confidence was up slightly around the world in the

second quarter of 2013, the increasing sense of optimism in Canada has

stalled.

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 98. That’s down four index points

from the last Nielsen survey, tied for the fourth biggest drop among the

58 countries surveyed.

Levels above and below 100 – a score that’s considered neutral – show

degrees of optimism and pessimism. Canada’s confidence score had

been increasing quarter by quarter for more than a year before this

recent reversal.

Overall, 45% of the countries surveyed reported increases in consumer

confidence. This continues what Nielsen calls “a slow but steady upward

movement”. Yet that recovery remains fragile in many parts of the world,

as the Canadian attitudes indicate.

“The recent decline in Canadian sentiment is a testimony of the

consumer volatility that still exists, and we’re still not out of the woods,”

says Carman Allison, director, Consumer Insights, Nielsen Canada.

“Based on economic projections, we expect 2013 to be a relatively slow

growth year for Canada’s economy.”

NIELSEN CONSUMER CONFIDENCE INDEX CANADA GLOBAL

Q2 2013 98 94

Q1 2013 102 93

Q4 2012 100 91

Q3 2012 99 92

Q2 2012 94 91


Q2 2013 Q1 2013 Q4 2012 Q3 2012 Q2 2012

CANADA

WORRIES FALL SLIGHTLY AROUND RECESSION AND JOBS The drop in overall consumer confidence is not reflected in Canadian

perceptions about many areas of the economy.

For example, the number of Canadians who feel that the country is still

in a recession is actually down, continuing an encouraging trend.

3Copyright © 2013 The Nielsen Company

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

50%49%48%49%47%

4 CONSUMER CONFIDENCE: A CANADIAN PERSPECTIVE – Q2 20134 CONSUMER CONFIDENCE: A CANADIAN PERSPECTIVE – Q1 2013

HOW DO YOU RATE JOB PROSPECTS?CANADA Q2

2013

CANADA Q1

2013

Excellent 4% 4%

Good 47% 46%

Not good 34% 38%

Bad 7% 5%

Globally, the percentage of respondents who believe their country is in

a recession in at the lowest level in two years. Of all the regions in the

world, North Americans reported the biggest decline in a recessionary

mindset.

Another positive: Canadians are more bullish about the job situation. In

the second quarter of the year, just over half of Canadians, 51%, rated job

prospects as good or excellent, vs. 41% who said prospects are not good

or bad. That’s an improvement from the first quarter (50% vs. 43%).

During May, when the Nielsen survey was conducted, Canada did gain

95,000 jobs according to Statistics Canada, a stark shift from March

when the economy lost 54,000 jobs. In May, the youth unemployment

rate fell by almost a full percentage point.

Overall, Canada is averaging just 16,000 new jobs per month in 2013. In

particular, the professional, scientific and technical industries are seeing

strong job growth, up almost 5% from a year ago.

SCIENTIFIC AND TECHNICAL INDUSTRIES ARE SEEING STRONG JOB GROWTH, UP ALMOST 5% FROM A YEAR AGO

5%

5CONSUMER CONFIDENCE: A CANADIAN PERSPECTIVE – Q2 2013 Copyright © 2013 The Nielsen CompanyCONSUMER CONFIDENCE: A CANADIAN PERSPECTIVE – Q1 2013

SPENDING STILL RESTRAINED While Canadians are relatively positive about jobs and the economy,

they are less so about their own spending.

Considering current costs and your personal finances, is this a good

time to buy the things you want and need? 42% of Canadians say yes

– that’s up from 34% exactly one year ago, but relatively flat, as the

comparable numbers from the previous three Nielsen surveys are 44%,

41% and 40%.

Moreover, Canadians are feeling significantly worse about of the state

of their personal finances. Barely half of Canadians, 51%, now consider

their finances be good, compared to 60% in the first Nielsen survey of

2013.

How has this affected spending? We’re seeing a bit of a paradox.

Although personal finances aren’t as good of late, spending is on the

rise in certain categories. Yet almost 40% of Canadians say they’re

putting spare cash into paying off debt – far more than the 25% of

global respondents or 30% of U.S. respondents who do the same.

“Record high consumer debt continues to restrain household spending

power, with consumers starting to holster their credit cards,” says

Allison. “The government has been urging Canadians for months to

start paying off debt, since higher interest rates are potentially around

the corner. It seems we’re finally getting the message.”

IS THIS A GOOD OR BAD TIME TO BUY?

CANADA

Q2 2012 2%

32%

47%

17%12%

14%

15%12%

45%43%42%

39%

35%37%

41%39%

5%Q3 2012

4%Q4 2012

3%Q1 2013

3%Q2 2013

EXCELLENT

GOOD

NOT GOOD

BAD

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013


SPENDINGSTRATEGIES

SAVINGSTRATEGIES

WHAT DO YOU DO WITH YOUR SPARE CASH?

OUT-OF-HOME ENTERTAINMENT

15%19%

18%22%

23%

14%14%15%

17%20%

22%

25%25%

29%

NEW CLOTHES

NEW TECHNOLOGY PRODUCTS

HOME IMPROVEMENTS/DECORATING

HOLIDAYS/VACATIONS

18%20%I HAVE NO SPARE CASH

PAYING OFF DEBTS/CREDIT CARDS/LOANS

PUTTING INTO SAVINGS

INVESTING IN SHARES OFSTOCK/MUTUAL FUNDS

RETIREMENT FUND

Q4 2012

Q1 2013

Q2 2013

44%42%

38%

38%

35%

13%14%

10%

15%

13%18%

40%

15%

18%


Cut down on take-away meals: 53% (-5)Spend less on new clothes: 51% (-8)Cut down on out-of-home entertainment: 50% (-11)Try to save on gas and electricity: 48% (-9)Switch to cheaper grocery brands: 42% (-2)Delay upgrading technology (PC, mobile, etc.): 33% (+6)Cut down on holidays/short breaks: 33% (+2)Cut out annual vacation: 31% (+8)Delay replacing major household items: 29% (+3)Use my car less often: 28% (-4)Cut down on telephone expenses: 26% (-7)Cut down on at-home entertainment: 23% (-1)Cut down on or buy cheaper brands of alcohol: 21% (+2)Look for better deals on home loans, 21% (-3) insurance, credit cards, etc.: Cut down on smoking: 14% (+1)

60% HAVE CHANGED SPENDING HABITS Six in ten Canadians say they’ve changed their spending to save on household expenses. However, the commitment to these habits continues to shift.

Nielsen asks consumers about 15 savings habits. In nine, the percentage of Canadians who are cutting back is down. At the same time, growing numbers say they’re saving money by going away less (cutting down on holidays or cutting the annual vacation), or delaying key purchases (upgrading technology or replacing major household items).

Here are the 15 saving strategies measured, with the percentage change from the Q1 2013 Nielsen survey in parentheses.

Allison says that Canadians have changed some of their fundamental spending habits, as far as where they shop and the deals they seek. “At this point, 2013 is trending to be repeat performance of 2012,” he says. “We’re seeing consumer package good growth stall, as consumers continue to focus on spend control – shopping more at discount retailers and buying more at reduced prices.”


WHAT IS YOUR BIGGEST

CONCERN OVER THE NEXT

SIX MONTHS?

#1 CONCERN

#2 CONCERN

TOTAL

Debt 13% 11% 24% (-3)

The economy 11% 13% 24% (/)

Job security 14% 6% 20% (-1)

Health 11% 9% 20% (/)

Increasing food prices 6% 11% 17% (-4)

Increasing utility bills 7% 8% 15% (-3)

Work-life balance 7% 6% 13% (/)

ECONOMY STILL DOMINATES CONCERNS Debt and the economy remain the biggest concerns for Canadians. Yet

the latest Nielsen survey reveals some mixed signals. While the overall

confidence of Canadian consumers has slipped somewhat, economic

worries – which dominate the list – are not taking quite the same toll.

The percentages of Canadians who cite these worries are either down or

unchanged.

Here’s what Canadians named as their #1 and #2 concerns over the next

six months, noting the percentage change from the Q1 Nielsen survey;

(/) indicates no change.

Still, don’t expect Canadians to open their wallets wider just yet. Says

Allison: “Record high consumer debt, stabilized home prices and a

slowing equities market have restrained household spending power.”

CONSUMER CONFIDENCE: A CANADIAN PERSPECTIVE – Q2 2013

ABOUT THE SURVEY The Nielsen Global Online Survey was conducted May 13-31, 2013, and

polled more than 29,000 consumers online in 58 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 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. 13/6786

consumer confidenc e - nielsen...consumer volatility that still exists, and we’re still not out of...

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