If you thought recessionary worries are over, you are wrong. The woes triggered by recession apart, the American consumers now have a new foe to fight against – in the form of inflationary worries owing to rising costs. The GfK Roper Consulting 2011 Mood of the World Report has revealed that the foremost concerns of the consumers in the US, and also globally, are economic ones. It has been pointed out that inflation and high prices (ranking 3rd in the US), recession and unemployment (1st), having enough money to pay the bills (2nd), crime and lawlessness (6th) and environmental pollution (11th) are the key aspects in this front.
The report, based on a global survey of more than 32,000 consumers, ages 15 and older in 25 countries. It found that though the cost of living in the US rose more than expected in May 2011 as US inflation picked up speed and unemployment rose to 9.1 percent, consumers have become somewhat more optimistic about their economic well being.
On a global scale, Spain has replaced the US as the country with the highest Consumer Recession Index. According to Holly Jarrell, Group Managing Director of GfK Roper Consulting:
“One of the countries we looked at especially closely this year was Egypt, because we wanted to see how the recent economic and political turmoil truly affected the country’s people… It turns out that while Egyptians understandably list crime and lawlessness as their top concern, they also register higher-than-average levels of worry about inflation and recession. In contrast, their already lower-than-average level of concern about pollution has dropped even further, from 8th to 12th place, compared with 5th place globally. When people are preoccupied with concerns about financial and political stability, they tend to put social and other issues on the back burner.”
It has also been pointed out that global economies are stabilizing and are showing encouraging signs of growth, but optimism among consumers has been slow to materialize.
Sixty-eight percent of respondents in the US and 59 percent globally report that their household experienced at least one negative economic event in the past year such as a job loss, difficulty paying bills, or housing distress of some kind; these numbers are essentially unchanged from the previous year. This in turn has led to many still feeling very hesitant about buying conditions. Globally, only 17 percent feel it is “a good time to buy” the things they want and need, while 40 percent feel it is “a good time to wait.”
The survey findings revealed that consumers are adapting to the financial pressures they face in a variety of ways. Half of the consumers worldwide have used coupons during the past year –ranking it highest among ten strategies used to save money in 12 of 25 countries.
Besides, 84 percent of global consumers have cut back in at least one of 26 areas identified in the survey. One of the most common cost-cutting measures among global consumers is dining out less frequently.
Spain has the highest percentage of consumers doing so at 68 percent, compared to 62 percent in the US and 44 percent of consumers globally. Indeed, more than 90 percent of Spaniards made at least one cutback and 96 percent used at least one savings strategy, which along with high levels of economic distress, explains why Spain tops this year’s Consumer Recession Index.
Meanwhile, consumers in the BRICS nations (Brazil, Russia, India, Indonesia, China, and South Africa) report less economic pressure and therefore take fewer actions to save money than those in other counties.
The Mood of the World Report also suggests that optimism is still tempered and closely tied to the lingering effects of the global financial crisis. Consumer sentiment and attitudes are constantly evolving and, until financial stability is perceived by consumers, the financial pressures they face will have a direct correlation to the actions they take.