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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
3CONSUMER CONFIDENCE: A CANADIAN PERSPECTIVE – Q2 2013 Copyright © 2013 The Nielsen Company
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
6 CONSUMER CONFIDENCE: A CANADIAN PERSPECTIVE – 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%
7CONSUMER CONFIDENCE: A CANADIAN PERSPECTIVE – Q2 2013 Copyright © 2013 The Nielsen Company
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.”
8 CONSUMER CONFIDENCE: A CANADIAN PERSPECTIVE – Q2 2013
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
10 CONSUMER CONFIDENCE: A CANADIAN PERSPECTIVE – Q2 2013