Global Consumer Confidence Unchanged
Lack of momentum suggests increasing concerns about the durability of global consumer spending in 2020
Q4 2019 global consumer confidence was unchanged at 107, suggesting more optimistic than pessimistic consumers; however, out of 64 markets surveyed, 30 saw a decline in confidence
Concerns about future job prospects, which had already increased in Q3 2019, have begun to weigh on consumer sentiment about personal finances and spending intentions
While consumer confidence in North America and Asia-Pacific remains the highest, in China, Japan, and several Southeast Asian markets, confidence is under slightly greater strain
Consumer confidence in the Euro Area is well below 100, but remained unchanged relative to previous quarters; Confidence declined in Germany, Italy and Spain, but improved in France
NEW YORK, NY, January 16, 2020…The Conference Board® Global Consumer Confidence Index, conducted in collaboration with Nielsen, was unchanged in Q4 2019 at 107 (a reading of 100 or above is considered positive). The index has been relatively flat in recent quarters, despite hovering at historically high levels for more than a year.
“The continued lack of momentum in global consumer confidence raises concerns about the durability of consumer spending as a major source of growth in 2020,” says Bart van Ark, Chief Economist of The Conference Board. “While The Conference Board projects global economic growth to improve slightly to 2.5 percent in 2020—up from 2.3 percent in 2019—we should not take it for granted that consumer spending will continue to prop up the economy. Increased investment, an improvement in manufacturing production and trade, and more productivity growth are critical elements of a growth recovery.”
Out of 64 markets surveyed, 30 of them (14 emerging and 16 mature) saw a decline in consumer confidence (see table below). This is a slight improvement from last quarter, when 33 markets saw a decline (14 emerging and 19 mature). However, confidence weakened in several larger economies (including China, Germany, Japan, Mexico, Russia, and Turkey), offsetting gains in other regions.
Consumer confidence remains highest in Asia-Pacific and North America. However, while consumer confidence in the US modestly improved over the previous quarter, it weakened in several Asian markets, including those in China, Japan, and Southeast Asia. Consumer confidence in the Euro Area is well below 100 but remained unchanged relative to previous quarters. Confidence declined in Germany, Italy and Spain, but improved in France. Consumer confidence faces challenges in Latin America but has been strengthening in the Gulf Region.
Consumer Caution on the Rise
“Strong labor markets, rising wages, and low consumer price inflation supported consumer spending in 2019,” says Elizabeth Crofoot, Senior Economist, The Conference Board. “An intensification of concerns about job security and personal financial well-being, especially if combined with lingering geopolitical uncertainties, may erode consumers’ confidence in the economy and cause them to rein in their spending.”
Consumer concerns that the economy is in recession (in their market) have visibly increased in Asia-Pacific and Europe over the past year, but eased slightly in North America and Latin America. Labor markets are tightening in many economies, and the number of additional jobs created is slowing. This slower job growth is reflected in increasing consumer concerns about job prospects. Wages have not risen as rapidly as expected, and consumers, especially less affluent ones, are therefore slightly more concerned about personal finances. And while low inflation in most markets—but not all—makes this a good time to spend, such favorable conditions will not last forever.