Savings now top priority for spare cash – Nielsen

It should come as no surprise to learn that nearly everyone believes that Ireland is still in recession. 96 per cent of respondents to a recent Nielsen survey believed this to be the case for the first three months of 2012 compared with a global figure of just 47 per cent. And only 11 per cent believe that Ireland will be out of recession in a year’s time.

With unemployment still standing at over 14 per cent, six in 10 respondents to the Nielsen Q1 survey indicated that they thought that general business conditions in their own area were ‘bad’ with 63 per cent indicating that ‘available jobs in my area right now are hard to get’.

And with bills now a key household budget worry, savings have become the top priority for any spare cash.

Despite these findings, Nielsen reports that Irish consumers had a slightly more positive outlook in Q1 of 2012 having experienced an “all-time low” in sentiment in Q4 of 2011.

Nevertheless Ireland’s Consumer Confidence increased four index points to 64 in Q1 of 2012, according to the company’s latest round of global consumer confidence survey findings. Rising bills and financial burdens are however still hitting Irish households hard in 2012 and strong concerns over the nation’s economy and high unemployment also continue to influence consumer spending behavior and sentiment, it reports.

Only 28 percent of Irish online consumers described their personal finances for the next 12 months as excellent/good, (though up from 22 per cent in Q4 of 2011) and only 25 per cent indicated it was a good time to buy the things they want and need.

Clearly, the majority of Irish consumers are still not ready to spend – 85 per cent have changed their spending in order to save on household expenses.

The Nielsen survey indicates that 67 per cent are pessimistic that their finances will improve over the next 12 months and that 84 per cent continue to feel negative about job prospects.

“Rising fuel costs, new household charge of €100…all are taking their toll on the already stretched Irish household budget. Saving on bills is the strongest saving strategy this quarter (68 per cent) along with saving on cheaper grocery brands (65 per cent) and spending less on new clothes (64 per cent).”

Compared to Q4 of 2011 some 60 per cent have opted to cut down on out-of-home entertainment (down two per cent on the previous quarter).

According to Nielsen, “Intended saving and discretionary spend increased in Q1 2012. One third of consumers plan to put spare cash into savings, up five per cent versus Q4 2011. 28 per cent intend to spend spare cash on holidays and vacations, a considerable rise of nine percentage points from Q4 2011. Planned spending on home improvements also increased by five percentage points, while out of home entertainment increased three percentage points to 17 per cent”.