Strong Rebound in India Lifts Global Consumer Confidence to Record High in Q3--But Optimism is Down in Other Key Markets Amid Delta Variant Surge
NEW YORK, Oct. 11, 2021 /PRNewswire/ -- Global consumer confidence advanced to another record high in the third quarter of 2021, according to The Conference Board® Global Consumer Confidence Survey. However, Q3's gains were fueled largely by a powerful rebound in India—the first country crippled by the Delta wave earlier this year—and belied decreases in other major economies where the highly infectious viral variant impacted growth.
Overall, global consumer confidence climbed to 115 in Q3 2021, up from 109 in Q2. (A figure above 100 is considered positive.) Confidence rose in 40 of 65 markets (62%) surveyed, led by a 57-point gain in India. If India were excluded, the Global Consumer Confidence Index would have ticked down—from 108 in Q2 to 106 in Q3. Major economies including the US, China, Mexico, Australia, much of Eastern Europe, and several smaller Asian emerging markets all saw confidence decline as Delta fueled renewed lockdowns, factory closures, supply chain disruptions, increased inflationary pressures, and delayed labor market recoveries.
"While consumer confidence remains historically high globally, regional weakness linked to the Delta variant casts a pall over prospects for spending and economic revival through the rest of 2021," said Dana Peterson, Chief Economist of The Conference Board. "These setbacks notwithstanding, consumer spending intentions, job prospects, and personal finances remain elevated and signal continued recovery through 2022, where we project global GDP to grow by 3.9%—a full percentage point higher than the average in the wake of the Great Recession (2011-2019)."
Q3's sharp regional divergence in confidence closely track the spread of the Delta variant—with India leading the way in optimism after being the viral epicenter earlier in 2021:
- Asia saw the sharpest rise in confidence of any region (+11 pts to 126) in Q3. However, this was fueled almost entirely by India. Overall, 8 out of 14 Asian markets saw confidence decline—including China, Australia, and South Korea. Sentiment about job prospects eroded in Australia, Japan and South Korea, but overall remained positive for the region. In markets such as Indonesia, Japan, South Korea, and Thailand, consumers' outlook regarding their personal finances declined. Consumers' spending intentions deteriorated in markets such as Australia, China, Indonesia, and South Korea.
- Consumers in North America—along with the Gulf Cooperation Council (GCC)—remain among the most confident overall. However, confidence gauges in North America and the GCC retreated somewhat from record highs in the previous quarter as consumers in the US (−4 pts to 123) and Saudi Arabia (−8 pts to 122)—the two largest markets in those regions—were less sanguine amid the renewed virus threat. In the US, the Delta decline may have been exacerbated by the expiration of unemployment benefits. However, a tight labor market and accelerating wage growth will likely help temper employment concerns in the near-term.
- Confidence ticked up in Europe (+1 pt to 93). Confidence declined in Eastern Europe, while the picture was mixed in major Western European economies: Markets in the north (e.g., France, Germany, the UK) experienced little to no improvement in sentiment, but markets in the south (e.g., Italy, Portugal, Spain) reported higher readings. Across the region, job prospects remained a main drag on confidence, while European consumers remained moderately optimistic about the outlook for their personal finances. Spending intentions declined further in Q3, with Russia posting the largest decline. However, in some of the larger European economies such as Germany and the UK, consumers remained optimistic about spending.
- Confidence rose across most of Latin America in Q3 (+ 5 pts to 98)—with Mexico and Peru the only exceptions. Job prospects and personal finances in the region improved markedly, while spending intentions posted a modest gain. Despite the improvement, consumers remained pessimistic about job prospects and spending. As a result, saving intentions were high, suggesting a heightened level of cautiousness. A decline in COVID-19 infections points to a favorable short-term outlook in the months ahead. However, upcoming monetary and fiscal tightening policies could cloud the outlook for 2022, especially as unemployment and inflation remain elevated.
Recession concerns rose slightly in Q3 after dropping substantially earlier this year, while inflation and climate rose on the list of consumer concerns
- The proportion of global consumers who believed their country was in recession ticked up by 1 ppt to 61% in Q3. This is down sharply from the pandemic peak of 86%, but indicates that while the COVID-19 recession ended in 2020 in most major economies, many consumers feel otherwise. This disconnect may be due in part to the ongoing recovery in employment, which tends to lag the revival of output. However, 45% of consumers expected their economy to be out of recession in 12 months.
- Health continued to top the list of greatest concerns among consumers globally over the next six months as the Delta variant spread across the globe. However, the percentage of respondents with this concern (22%) edged down slightly, potentially as vaccination campaigns picked up speed in regions that were lagging—most notably Asia and Latin America.
- The economy (16%) and job security (12%) remain high-priority issues. Renewed disruptions in factory production, supply chains, travel, spending on in-person services, and daily living likely kept concerns about the economic recovery elevated, while many regions saw the labor market healing that occurred earlier this year slowed or even halted as hiring and in-person services suffered Delta setbacks.
- Meanwhile, concerns over increasing prices (10%) and global warming (7%) continued to tick up. Notably, the proportion of consumers worried about climate more than doubled over the past year, with nearly every region recording an uptick. Inflation worries intensified throughout Latin America, Africa and the Middle East, and to a lesser extent in Europe.
About The Conference Board
The Conference Board is the member-driven think tank that delivers trusted insights for what's ahead. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. www.conference-board.org.
SOURCE The Conference Board
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