Jun 04 2012
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Egypt consumer confidence up in Q1
"The jump in Egyptian confidence is not entirely surprising given that the Parliamentary elections are next week," said Ram Mohan Rao, Managing Director Nielsen Egypt. "However, this is not yet a rising tide raising all ships since the nation is suffering from unemployment and harsh social conditions.
Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism.
More than half of consumers surveyed said they are in a recession, down from Q4 2011. In Nielsen's survey, while more than half (57 percent) of consumers around the world indicated they were in a recession, that sentiment was down from 64 percent last quarter.
Lesser people in Egypt say their country is in a recession at the moment (85 percent) compared to 90 percent last quarter and more than half of consumer (55 percent) think their country will be out of the recession in the next 12 months.
"Egyptians trust in their abilities and resources and this is how they trust their country can come out of this recession. They also believe that with the fall of the regime and the eradication of corruption the economy will improve as well as their condition. Some experts say Egypt could be one of the world's top 10 economies in a generation. That's a goal worth working toward," said Ram.
Perception among Egyptian respondents of local jobs prospects over the next 12 months increased 9 percentage points since last quarter where 54 percent find it good/excellent.
As for the Egyptians' perception of state of personal finances over the next 12 months, it also increased 3 percentage points, where 58 percent of respondents find it good/excellent
More than half (55 percent) of global online consumers described their personal finances for the next 12 months as excellent/good, up from 52 percent in Q4 2011, while one-third (33 percent) indicated it was a good time to buy the things they want and need. Local job prospects improved globally by six percentage points in Q1, yet less than half (48 percent) perceived the outlook for the upcoming year as favorable.
When asked about whether consumers changed their spending to save on household expenses, 65 percent of the Egyptian online respondents said yes, which is 5 percentage points less than last quarter and the lowest since a year ago. As for the actions taken to cut down on house hold expenses, 49 percent said they cut down in take away meals, 45 percent spend less on new clothes, 41 percent cut down on out of home entertainment, 41 percent cut down on telephone expenses, 30 percent will delay upgrading technology devices, 22 percent try to save on gas and electricity, 16 percent switch to cheaper grocery brands, 12 percent cut down on smoking and 11 percent use their car less.
When economic conditions improve, 30 percent of the Egyptian respondents said they will continue to cut down on take away meals, 17 percent say they will remain to cut down on telephone expenses and 12 percent will try to save on gas and electricity and 10 percent will cut down on new clothes.
"Improved confidence led to more discretionary spending from consumers around the world," said Ram. "The survey evidence suggests that while consumers are neither as confident nor comfortable with the economy as they would like to be, they are expressing a pent-up demand to spend as they did prior to the revolution." - SG Additionally, consumers are getting used to the daily issues that used to create uncertainty."
Only 36 percent of Egyptian respondents find it a good time for people to buy the things they want and need over the next 12months yet it higher 2 percentage points than last quarter and less 7 percentage points than last year.
As for using the spare cash after covering the essential living expenses, 41 percent put it into savings, 28 percent spend it on new clothes, 23 percent use it on out of home entertainment, 16 percent spend it on holidays, 16 percent spend it on new technology products and 21 percent said they have no spare cash, compared to 23 percent last quarter and 28 percent a year ago.
Top worry among Egyptian respondents remains to be political stability with 37 percent, this puts Egypt on top of the global top 10 countries to consider political stability as major concern. Followed by the economy 36 percent - also Egypt joins the rest of the world in the big worry for economy and comes as the 9th country on the global scale to worry about the economy. Job security worries 26 percent of consumers. Egypt ranks the 6th country globally to worry about crime (17 percent) after Venezuela, Argentina, Peru, Mexico and South Africa.
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