• by Jack Loechner , Staff Writer @mp_research, November 5, 2010

According to the third quarter Nielsen Global Consumer Confidence Index consumers find a full economic recovery in 2010 to be highly unlikely. After an upbeat start to the year with two consecutive quarters of increased optimism, global consumer confidence fell three points in September to an Index of 90.

Consumer confidence declined in 19 of 53 global markets:

• One in four North Americans and one in five Europeans have no discretionary income
• Rising food prices are a top concern for one in four Asians
•  Increasing utility prices are Europeans' biggest concern
• Recovery is back on track in North-West Europe, while the recessionary mindset lives on in Southern Europe
• Nine of the top 10 most confident nations hail from the Asia Pacific region.

Consumer Confidence Index levels above and below a baseline of 100 indicate degrees of optimism and pessimism.  The 90 Index mark reflects that consumers around the world are largely pessimistic about job prospects, personal finances and their ability to buy the things they want and need over the next year.

While positive sentiment drove confidence levels up in the first half of this year, consumer confidence declined in 19 of 53 global markets in the third quarter.

3rdQ 2010 Global Consumer Confidence Index (Global Average: 90)
Country	Index
Indonesia	115
China	104
Brazil	103
Canada	101
Norway	101
Israel	98
Columbia	96
Russia	90
Pakistan	89
Vietnam	89
South Africa	87
United States	81
Mexico	81
United Kingdom	75
France	67
Spain	65
Italy	64
Hungry	54
Japan	52
Source: The Nielsen Company, October 2010

Dr. Venkatesh Bala, Chief Economist at The Cambridge Group, notes that "... the reversal of global consumer confidence in the third quarter highlights the fragility and uncertainty of the current global economy, its ongoing vulnerability to macroeconomic shocks and... the divergence in the pace of recovery among international markets and regions."

For many consumers, spending on non-essential goods has become more restrained this year compared to the height of the global recession two years ago. Discretionary income reached an all time low for many consumers in the third quarter, with no cash left after paying essential living expenses for:

•  27% of Americans,
• 19% of Europeans,
• 17% of Middle Easterners/Africans and
• 16% of Latin Americans

The most popular destination for spare cash (left after covering essential living expenses) for global consumers in Q3 2010 was savings, with 49% indicating they would put spare cash toward savings. Other popular uses for spare cash (more than one response was permitted) included holidays/vacations, new clothes, and paying off debts/credit cards loans.

Utilization of Spare Cash After Living Expenses (Residual Income, % of Respondents, Global Average; Q3, 2010)
Utilization	Average % of Global Respondents
Put into savings	49%
New clothes	34
Holidays/Vacations	33
OOH entertainment	32
Pay debts, credit cards, loans	29
New technology/products	26
Home improvements/decorating	21
Investing: stock/mutual funds	21
No spare cash	14
Retirement fund	11
Don't know/undecided	3
Source: The Nielsen Company, October 2010

In the latest round of the survey, conducted between September 3 and September 21, 2010, consumer confidence in most markets showed continued spending restraint.  56% of global consumers believe they are currently in recession and 48% do not believe they will be out of a recession in the next 12 months.

The report says that the economy remains the number one concern for more than one in four North Americans (27%) and worries about health jumped five percentage points. Health is now the number one concern for 10% of respondents in North America.

Rick Kash, CEO of The Cambridge Group, concludes that "... slipping back into a full blown global recession is unlikely... consumers have accepted that there are no quick fixes to the persistent economic issues of unemployment and government budgetary woes that... constrain economic revival... "

Please visit Nielsen here for additional information about the study.