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Egyptian consumer confidence increases five points to 97 in Q1 2012

Overall confidence rose in 68% of global markets measured by Nielsen, a leading global provider of information.
Nielsen Egypt | 03.06.2012
Global consumer confidence increased five index points to 94 in Q1 2012, according to global consumer confidence findings from Nielsen, a leading global provider of information and insights into what consumers watch and buy.

In the latest round of the survey, conducted between February 10 and February 27, 2012, overall confidence rose in 68% of global markets measured, compared to Q4 2011 where confidence increased in 21% of global markets. Confidence in Q1 2012 increased in 38 out of 56 markets, fell in 16 markets and remained flat in two.

"Households around the globe experienced brighter personal situations in terms of jobs and personal finances last quarter, especially in the U.S. and Asia, which was reflected with improved consumer confidence and higher discretionary spending," said Dr. Venkatesh Bala, chief economist at The Cambridge Group, a part of Nielsen. "While global economic conditions are more stable than in the depths of the European sovereign debt crisis late last year, underlying economic conditions are still fragile and fluid in many parts of the world, which could affect consumer confidence and spending momentum for the coming quarter."

Consumer confidence among the Egyptian consumers increased 5 points than last quarter and also 5 points than a year ago.

"The jump in Egyptian confidence is not entirely surprising given that the Parliamentary elections are next week," said RamMohan Rao, Managing Director Nielsen Egypt. "However, this is not yet a rising tide raising all ships since the nation is suffering from unemployment and harsh social conditions.

The Nielsen Global Survey of Consumer Confidence and Spending Intentions, established in 2005, tracks consumer confidence, major concerns and spending intentions among more than 28,000 Internet consumers in 56 countries. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism.

More than Half of Consumers Surveyed Said They Are in a Recession, Down from Q4 2011:

In Nielsen's survey, while more than half (57%) of consumers around the world indicated they were in a recession, that sentiment was down from 64% last quarter.

Lesser people in Egypt say their country is in a recession at the moment (85%) compared to 90% last quarter and more than half of consumer (55%) think their country will be out of the recession in the next 12 months.

"Egyptians trust in their abilities and resources and this is how they trust their country can come out of this recession. They also believe that with the fall of the regime and the eradication of corruption the economy will improve as well as their condition. Some experts say Egypt could be one of the world's top 10 economies in a generation. That's a goal worth working toward," said Ram.

Consumers Around the World Cite Improved Job Prospects and Personal Finances:

Perception among Egyptian respondents of local jobs prospects over the next 12 months increased 9 percentage points since last quarter where 54% find it good/excellent.

As for the Egyptians' perception of state of personal finances over the next 12 months, it also increased 3 percentage points, where 58% of respondents find it good/excellent

More than half (55%) of global online consumers described their personal finances for the next 12 months as excellent/good, up from 52% in Q4 2011, while one-third (33%) indicated it was a good time to buy the things they want and need. Local job prospects improved globally by six percentage points in Q1, yet less than half (48%) perceived the outlook for the upcoming year as favorable.

Discretionary Spending and Saving Increase:

When asked about whether consumers changed their spending to save on household expenses, 65% of the Egyptian online respondents said yes, which is 5 percentage points less than last quarter and the lowest since a year ago. As for the actions taken to cut down on house hold expenses, 49% said they cut down in take away meals, 45% spend less on new clothes, 41% cut down on out of home entertainment, 41% cut down on telephone expenses, 30% will delay upgrading technology devices, 22% try to save on gas and electricity, 16% switch to cheaper grocery brands, 12% cut down on smoking and 11% use their car less.

When economic conditions improve, 30% of the Egyptian respondents said they will continue to cut down on take away meals, 17% say they will remain to cut down on telephone expenses and 12% will try to save on gas and electricity and 10% will cut down on new clothes.

"Improved confidence led to more discretionary spending from consumers around the world," said Ram. "The survey evidence suggests that while consumers are neither as confident nor comfortable with the economy as they would like to be, they are expressing a pent-up demand to spend as they did prior to the revolution. Additionally, consumers are getting used to the daily issues that used to create uncertainty."

Only 36% of Egyptian respondents find it a good time for people to buy the things they want and need over the next 12months yet it higher 2 percentage points than last quarter and less 7 percentage points than last year.

As for using the spare cash after covering the essential living expenses, 41% put it into savings, 28% spend it on new clothes, 23% use it on out of home entertainment, 16% spend it on holidays, 16% spend it on new technology products and 21% said they have no spare cash, compared to 23% last quarter and 28% a year ago.

Intended discretionary spending and saving increased in Q1 across all sectors reviewed. Half of consumers around the world plan to put spare cash into savings, up from 48% in Q4 2011. 34% intend to buy new clothes, up from 31% the previous quarter and 33% expect to spend spare cash on holidays and vacations—a rise of seven percentage points from Q4 2011. Planned spending on technology also increased, with 28% of global online consumers intending a purchase, up from 22% the previous quarter.

Egyptians Are the Most Worried About Political Stability for the second consecutive quarter:

Top worry among Egyptian respondents remains to be political stability with 37%, this puts Egypt on top of the global top 10 countries to consider political stability as major concern. Followed by the economy 36%- also Egypt joins the rest of the world in the big worry for economy and comes as the 9th country on the global scale to worry about the economy. Job security worries 26% of consumers. Egypt ranks the 6th country globally to worry about crime (17%) after Venezuela, Argentina, Peru, Mexico and South Africa.

Global consumer concern for the economy remained a top worry among one-in-five global respondents (19%)—up from 18% in Q4 2011. Job security (15%), work/life balance (10%), health (8%), and increasing food prices (7%) were other key concerns.

Regional Roundup:

Consumer confidence rose in all global regions, with North America posting the biggest regional gain, up eight index points to 92. Asia-Pacific posted an index of 103, up four points,
and the Middle East/Africa rose two points to 97. Confidence in Europe rose one point to 72 and Latin America remained flat at 98 index points.

The biggest quarterly confidence gains last quarter came from Taiwan (+13), Chile (+11) the United States (+9), Venezuela (+9), Malaysia (+6), Denmark (+6), Estonia (+6), Saudi Arabia (+6), United Kingdom (+6), and Peru (+6).

India remained the world's most optimistic market for the ninth consecutive quarter with a one point consumer confidence increase to 123, followed by Saudi Arabia (119), Indonesia (118) and the Philippines (118). Hungary was the world's most pessimistic market at 32 index points, followed by Greece (37) and Portugal (39).

The biggest quarterly declines came from Australia (-8), Poland (-8), Sweden (-7), Belgium (-7) and France (-5).