1CONSUMER CONFIDENCE: A CANADIAN PERSPECTIVE – Q4 2013 Copyright © 2014 The Nielsen Company
CONSUMER CONFIDENCEA CANADIAN PERSPECTIVE Q4 2013
2 CONSUMER CONFIDENCE: A CANADIAN PERSPECTIVE – Q4 2013
CONFIDENCE LEVELS BACK UP, AS CONSUMERS FEELING A LITTLE BETTER ABOUT JOBS AND SOME SPENDINGCanada is bucking a global trend, with consumer confidence up after two
consecutive quarters of declining optimism.
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 was up to 100 in the final quarter of 2013,
a three point jump. In the Nielsen survey, a score of 100 is considered
neutral. Levels above and below show degrees of optimism and
pessimism.
In contrast to the rising confidence in Canada, the global confidence
level stands at 94, the same as in Q3 and Q2. In the latest Nielsen
survey, only 26 of the 60 markets surveyed, including Canada, showed
an increase in confidence.
Canadians were more hopeful about their finances in the fourth quarter,
and entered 2014 on a positive note. “While consumer volatility remains,
lower unemployment and inflation levels contributed to the optimistic
sentiment among Canadians,” says Carman Allison, vice president,
Consumer Insights, Nielsen Canada.
NIELSEN CONSUMER CONFIDENCE INDEX
CANADA
GLOBAL
100
97
98
102
Q4 2013
Q3 2013
Q2 2013
Q1 2013
94
94
94
93
Q4 2013
Q3 2013
Q2 2013
Q1 2013
3CONSUMER CONFIDENCE: A CANADIAN PERSPECTIVE – Q4 2013 Copyright © 2014 The Nielsen Company
RECESSION FEARS WANEIn Q4, Canada showed a marked decrease in the number of people who
feel that the country is in recession – down five percentage points to 42%.
Consumer sentiment is one reason why the recovery from the recession
has been slow. In Canada and around the world, many people feel that
their country is still in recession, despite the official end more than four
years ago.
Globally, 57% of people say their country is still in recession, and in the
U.S. that number is 71%. After just about half of Canadian consumers
showed a recessionary mindset for most of the year, the drop in fear is
encouraging.
CANADA
47%
42%
47%
49%
4e trimestre 2013
3e trimestre 2013
2e trimestre 2013
1er trimestre 2013
DO YOU THINK YOUR COUNTRY IS IN AN ECONOMIC RECESSION AT THE MOMENT? (% ANSWERING YES)
4 CONSUMER CONFIDENCE: A CANADIAN PERSPECTIVE – Q4 20134
JOB HOPES UP SLIGHTLYThe percentage of Canadians who rate job prospects as good or excellent
has been relatively static all year, though ended the year on an up note.
Should Canadians be bullish about job prospects? Jobs were up in
November, when the survey was conducted. However, in the last month
of 2013 employment unexpectedly fell by 46,000, and the unemployment
rate rose 0.3 percentage points to 7.2% according to Statistics Canada.
For 2013, employment gains were 102,000, or 0.6%. That was the
slowest 12-month growth rate since 2009. The year before, growth was
310,000 or 1.8%.
Outlooks for 2014 are unclear. A survey of over 1,900 employers across
Canada by the Manpower Group, for instance, showed that 13% plan
to add jobs in Q1 of 2014 (while 8% are expected to cut back). Several
forecasts say pay increases for 2014 are expected to only keep pace with
2013. It’s a reminder that the job and wage situation is still somewhat
volatile – the question is how that might affect consumer spending.
HOW DO YOU RATE
JOB PROSPECTS?
CANADA Q1
2013
CANADA Q2
2013
CANADA Q3
2013
CANADA Q4
2013
Excellent 4% 4% 4% 5%
Good 46% 47% 46% 47%
Not good 38% 34% 37% 35%
Bad 5% 7% 7% 7%
5CONSUMER CONFIDENCE: A CANADIAN PERSPECTIVE – Q4 2013 Copyright © 2014 The Nielsen Company
IS THIS A GOOD OR BAD TIME TO BUY?CANADA
EXCELLENT3%3%3%4%
39%38%39%
41%GOOD
39%41%42%
42%NOT GOOD
15%14%
13%
12%BAD
BIT BETTER TIME TO BUYAlthough the view of their finances is unchanged, Canadians are a little
more confident about spending. For the third consecutive quarter,
just about half of Canadians consider their finances to be good – 51%,
following 50% in Q3 and 51% in Q2 (all down from 60% in the first
consumer confidence of the year).
Even with that middling attitude, slightly more Canadians say it’s the
right time to buy what they need and want, considering their finances and
the costs of things. 43% now say it’s a good or excellent time, up by the
slimmest of margins from the 41% who said so in Q3 and the 42% in Q2.
Q1 2013 Q2 2013 Q3 2013 Q4 2013
“Canadians were more optimistic about their finances in the fourth
quarter and took advantage of cross-border shopping in the U.S.,”
says Allison. “In order to keep spending in Canada, many retailers
implemented U.S.-based promotions such as Black Friday and Cyber
Monday to jump start the holiday season, which translated to an
increase in overall retail sales of 3.5% compared to last year.”
6 CONSUMER CONFIDENCE: A CANADIAN PERSPECTIVE – Q4 2013
SPENDING PREFERENCES CONTINUE TO BOUNCEIn their spending intentions, Canadians are giving some mixed signals.
Marginally more Canadians may be saying it’s a good time to buy, and
retail sales may be up. Yet in several spending areas, the trend line is
down.
What do Canadians do with their money after covering essential living
expenses? Looking at spending strategies, we see a drop in four of
the five categories. Overall, on both the spending and savings sides,
consumer strategies have been yo-yoing through all of 2013.
7CONSUMER CONFIDENCE: A CANADIAN PERSPECTIVE – Q4 2013 Copyright © 2014 The Nielsen Company
WHAT DO YOU DO WITH YOUR SPARE CASH?
19% 42%
40%
14%
18%
20%
22%
14%
20%
25%
15% 38%
38%
10%
15%
28%
23%
15%
22%
29%
20% 37%
38%
11%
15%
19%
21%
17%
19%
26%
18% 35%
39%
11%
18%
19%
19%
15%
17%
28%
SPENDING STRATEGIES SAVING STRATEGIES
OUT-OF-HOME ENTERTAINMENT
PAYING OFF DEBTS/ CREDIT CARDS/LOANS
PUTTING INTO SAVINGSNEW CLOTHES
NEW TECHNOLOGY PRODUCTS
INVESTING IN SHARES OF STOCK/MUTUAL FUNDS
HOME IMPROVEMENTS/ DECORATING RETIREMENT FUND
I HAVE NO SPARE CASHHOLIDAYS/VACATIONS
Q1 2013 Q2 2013 Q3 2013 Q4 2013
8 CONSUMER CONFIDENCE: A CANADIAN PERSPECTIVE – Q4 2013
FEWER CANADIANS LOOKING TO CUT BACKIn looking to manage their spending and saving, the number of
Canadians seeking ways to cut their household expenses has fallen.
In Q4, 55% said they’ve changed their shopping patterns compared to
this time last year, down from 59% in Q3.
Where are consumers looking to scrimp? Hanging onto their wardrobe
longer seems to be in fashion. As other strategies have dipped, spending
less on new clothes is now the number one savings strategy, up from
number three last quarter.
The biggest changes in areas where consumers are looking to rein in–
jumps in delaying purchases, like replacing major household items and
technology upgrades. In contrast, notably fewer Canadians are now
cutting back on take-away meals, out-of-home entertainment, car use,
and short holidays or annual vacations.
Nielsen inquires about 15 savings habits. Consumers are turning to six
of them more often and six less often than in Q3, and in three categories
there was no change (the percentage change from the Q3 survey is in
parentheses).
Spend less on new clothes: 54% (/)Try to save on gas and electricity: 51% (/)Cut down on take-away meals: 50% (-6)Cut down on out-of-home entertainment: 49% (-5)Switch to cheaper grocery brands: 48% (/)Delay upgrading technology (PC, mobile, etc.): 35% (+3)Delay replacing major household items: 33% (+6)Cut down on holidays/short breaks: 33% (-5)Use my car less often: 31% (-5)Cut down on telephone expenses: 28% (+1)Look for better deals on home loans, insurance, credit cards, etc.: 24% (+3)Cut down on at-home entertainment: 24% (-2)Cut out annual vacation: 24% (-5)Cut down on or buy cheaper brands of alcohol: 18% (+3)Cut down on smoking: 11% (+1)
9CONSUMER CONFIDENCE: A CANADIAN PERSPECTIVE – Q4 2013 Copyright © 2014 The Nielsen Company
DEBT IS CHIEF WORRY, AS CANADIANS OWE MORE THAN EVERDebt is still the top concern of Canadians, and for good reason.
In December 2013, Statistics Canada reported that household debt had
reached yet another all-time high – 163.7%, which means Canadians owe
nearly $1.64 for every $1 in disposable income.
If there was any good news, it’s that the debt-to-income ratio was up
only slightly from the previous quarter, and that the Bank of Canada
expects the indebtedness numbers to stabilize and then slowly reverse
in the years ahead.
While concerns about debt and job security rose slightly – and concerns
about the economy in general actually decreased – the biggest jump
in worries was seen around utility bills, as Canadians headed into the
winter months.
Here are the seven issues that Canadians are most worried about over
the next six months. The numbers in parentheses notes the percentage
change from the Q3 Nielsen survey.
As we wrap up 2013 and head into 2014, Canadians are feeling relatively
neutral. However, with the recent decline in the dollar, and faced with
one of the coldest winters in recent memory, the impact of rising utility
bills may have the consumer starting off the new year in a negative
mood.
WHAT IS YOUR BIGGEST
CONCERN OVER THE NEXT
SIX MONTHS?
#1
CONCERN
#2
CONCERNTOTAL
Debt 17% 11% 28% (+1)
Job security 12% 9% 21% (+1)
The economy 11% 9% 20% (-2)
Increasing utility bills 6% 13% 19% (+5)
Health 10% 8% 18% (-4)
Increasing food prices 5% 12% 17% (-1)
Work-life balance 9% 6% 15% (+1)
CONSUMER CONFIDENCE: A CANADIAN PERSPECTIVE – Q4 2013
ABOUT THE SURVEY The Nielsen Global Online Survey was conducted November 11-29,
2013, and polled more than 30,000 consumers online in 60 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 China Consumer Confidence
Index is compiled from a separate mixed methodology survey among
3,500 respondents in China. 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 © 2014 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. 14/7422
11CONSUMER CONFIDENCE: A CANADIAN PERSPECTIVE – Q4 2013 Copyright © 2014 The Nielsen Company