Consumer Confidence Steady Across Much of Europe Before Brexit, but Low Scores Persist
OREANDA-NEWS. August 09, 2016. Notching a one-point increase from the first quarter, European consumer confidence was largely stable in the second quarter of 2016, at 79. Notably, consumer confidence improved from the first quarter in 22 of the 34 measured markets in the European region. Among the countries where confidence improved, most markets (16 of 22) saw small changes of four points or less. Likewise, of the 10 markets where confidence declined from the first quarter, seven fell by four points or less, and two markets were flat. The outcome of the Brexit referendum had not been decided at the time of the second-quarter survey.
In the U.K., consumer confidence edged up one point to 98 from the first quarter. Germany’s score of 96 represented a one-point decline, and France’s index increased two points to 66. While the quarterly outlook for jobs improved in Germany, from 55% seeing favorable prospects in the first quarter to 59% in the second quarter, it waned in the U.K.—down to 36% from 41% in the first quarter. In France, the outlook for jobs improved from 12% in the first quarter to 17% in the second quarter.
“In the U.K., many households are financially better off than in recent years, helped by low mortgage rates, falling energy and fuel prices, and low or no inflation, which is evident in the near-baseline consumer confidence score of 98,” said Steve Smith, market leader, Nielsen U.K. and Ireland. “However, with a lot of uncertainty at the moment, given the European referendum result, we can anticipate some changes in sentiment in the third quarter, which we will monitor closely.”
“German consumer confidence has remained relatively constant with scores at or just below the optimism/pessimism baseline for three years amid a climate of moderate price development, increasing employment and rising income,” said Ingo Schier, managing director, Nielsen Germany. “More than half of Germans expect their personal finances to be good or excellent in the next 12 months, and an overall positive sentiment is reflected in the outlook for jobs. While Germans are worried about terrorism, as concern levels have risen each quarter over the past year, it has not yet had a discernible effect on consumer sentiment."
Consumer confidence improved in the Nordic countries, as Denmark’s score increased seven points to 112—a recovery from the five-point decline in the first quarter. Scores from neighboring Sweden (90) and Norway (82) each increased by four points, and Finland’s score increase on point to 64.
“The majority of Danish consumers are confident about their finances, local job prospects and immediate-spending intentions, but retail sales at grocery have only seen modest growth rates of 1% or below over the last three years,” said Cecilie Westh, market leader, Nielsen Nordics. “Premium products and fresh fruit and vegetables, however, are growing, and sales of organics are on the rise.”
Terrorism continued to be a leading concern for Europeans in the second quarter. Nearly one-quarter of European respondents (24%) said terrorism was their biggest or second-biggest concern, an increase of two percentage points from the first quarter. Concerns about terrorism were highest in Turkey (where 61% placed it in the top two), France (40%), Switzerland (34%), Germany (33%), Belgium (31%), Norway (29%), the U.K. (27%), Austria (27%), the Czech Republic (27%) and the Netherlands (27%). The economy and job security also were major concerns, each cited by 20% of European respondents.