Global research shows recession depression slowly fading
KUALA LUMPUR — Leading global market research firm Synovate today released its latest global survey results on the economy, finding that people are slowly becoming more optimistic.
Synovate surveyed more than 17,300 people across 26 markets and found that people are regaining their positive outlook on the economy, becoming more optimistic for themselves and their country’s economy.
While the recession has cut a swathe through economies across the world, it has damaged some more than others - and changed people’s mindsets and habits in some places far more than others.
Synovate’s Global Director of Knowledge Management and Insights, Mike Sherman, said some people remain mired in gloom; some are just seeing an impact from the recession and others are over it... if not in their wallets, certainly in their minds.
“This global survey is useful for seeing overall trends and getting a sense of how people are feeling right now in individual markets. For an overall picture, we compared results from the 17 markets¹* that conducted the same survey in May 2009 and November 2008 and we see growing optimism across the world... or at least the slow abandonment of pessimism.”
The comparison across six months showed:
* In November 2008, 26% said the economy was in a bad patch but will get better quickly. In May 2009 that was up to 36%.
¹ The same questions were asked in November 2008 across 21 markets, some of which were different to the above. However, Synovate has looked at the 17 markets that participated in both waves to get a view of trends. The markets common to both surveys were Australia, Belgium, Brazil, Bulgaria, Canada, Denmark, France, Hong Kong, Japan, Malaysia, the Netherlands, New Zealand, Serbia, Taiwan, Turkey, the UK and the USA.
* In November 2008, 17% said the economy is as bad as it’s going to get. In May 2009 that was up to 23%.
* In November 2008, 50% said the economy is going downhill and is going to get worse before it gets better. In May 2009, only 36% agreed.
Growing optimism was also apparent when people were asked to examine their personal economic situation. When asked in November 2008 if their own situation will get better or worse in the next 12 months, 33% said worse. In May 2009, only 22% of respondents were that worried. Back in November, 38% said it would stay the same. In May 2009, 45% said it would stay the same. And 23% were out-and-out optimistic in November 2008, saying it would get better. That has risen to 28% in May 2009.
When it comes to their country, 53% predicted further gloom in November 2008, yet in May 2009 only 35% said the economy in their country would get worse. In November 2008, 20% said it would stay the same. In May 2009, 27% said it would. And the end of 2008 saw 22% saying things would be better in 12 months while in May 2009, 33% said things would be better.
Sherman summed up the six-month change as: “Last time, people thought they were doing relatively better than their countries. Now that has reversed. People feel a lot better about the national economy and a little better about themselves.”
Economy’s cup is half full for some...
While only 4% of respondents across the 26 markets in the latest survey think the economy in their country is strong, a few markets stood out as more optimistic.
Seventeen percent of respondents in Cyprus, 13% in both Brazil and India and 12% in Denmark go as far as to say their economies are strong. With India, Paru Minocha, Executive Director for Synovate in Mumbai, said the economy is felt to be inherently strong.
"The general mood here is upbeat. We were growing before this recession and our progress continues. Brands are launching and consumers are spending on entertainment and tourism. So saying, this is a saving culture. People put their futures first, so that may well have helped weather any minor difficulty.
“This was always seen as something affecting the West, although for awhile people thought it might hit India too. However, there is now an unshakeable belief that India is on the fast track - and even a recession cannot slow us down.”
Maria Pierrou, Director of Research for Synovate in Denmark, explained that the Danish nation is somewhat protected from global strife.
“Our economy is built on many small-scale industries rather than two or three large-scale ones. This means we are not as vulnerable as some of our Scandinavian neighbours.”
The most popular perception of the economy across all 26 markets was ’the economy is in a bad patch but will get better quickly’, chosen by an overall 39% of respondents. This was led by 75% of Indonesians, 59% of people from the United Arab Emirates (UAE) and 58% of Malaysians.
...and even ’empty’ cups are at least getting fuller
The study also showed that even the most pessimistic markets are still more optimistic than they were six months ago.
The 2009 survey asked respondents to sum up their view of the current state of their country’s economy. An overall 31% of respondents across 26 markets agreed that ’the economy is going downhill and will get worse before it gets better’, led by France, the United Kingdom (UK) and the United States of America (US).
Though these economies are perceived as going downhill, the slope may not be quite as steep as it was. More than half of French respondents had this belief in May 2009 (52%) versus 65% when the same question was asked in November 2008. Similarly, 51% of UK respondents chose that option (versus 75% last time) and 49% of Americans think the worse is yet to come (versus 69% last time).
US-based Research Director, Gregory Skinner, explained three important ways of thinking in the US.
"Consumer response to the recession is stratified. While it’s easy to lump everyone into one category and say that they’re compromising wants against needs or searching for balance, when you dig a little bit further you see that there are really three tiers of consumers.
"One – those worst off, simply concerned with making it through – they’re frightened and in full survival mode. Two – those who have been sensible about their spending – they feel in a good place and continue to spend, but are now open to previously unconsidered options. And three – people who remain very confident – they feel that this is a market correction (as with many others before) and that they can move forward with conviction.
“Over time, there is movement between the tiers and that’s what we’re seeing with fewer people feeling out-and-out pessimistic.”
A significant number of people went for the status quo too... an overall 23% said ’the economy is as bad as it’s going to get’, led by Korea (66%), Japan (48%) and Bulgaria (48%). This may not be too optimistic but at least these respondents believe the economy has ’bottomed out’.
What’s a brand to do?
Times are still very much uncertain but Sherman says it’s time for marketers to worry less.
“Many people wish they could go back to where they were, so lots of changes are temporary. Others will stick, but you can adjust strategies to that because most changes people will make have already been made. All in all, in consumable categories, people have cut back a little... not a lot.”
“And of course strategies need to be different market to market. The US, UK and France remain very cautious. India, Brazil, Denmark and a growing group of nations are finding reasons to be optimistic.”
Senior Vice President of Synovate’s Consumer Insights group, Bob Michaels, paints the picture for FMCG in the US.
“Almost everyone (71%) is still spending less. And they do so by making individual choices regarding where to cut and where to treat themselves. Almost all categories suffer. The key for brands is to understand their market segments, which segments are price driven and how to appeal to those who are willing to pay more in their category.”
At the other end of the scale, Indians have changed very little indeed and the nation remains a heady environment, ripe for brand launches.
“Marketers always need to keep their ears to the ground and monitor how people are feeling, both within and across markets. But never more so than now,” says Sherman.
* The cup of tea as the answer to everything remains in place in Britain. 77% of people there are spending the same as always on hot beverages.
* 42% of Argentineans think their economy will ’stay the same’ in the next year. Having gone through a major crisis at the end of 2001, Argentineans have developed strategies to overcome tough times.
* 20% of Taiwanese are checking prices less than they were six months ago. Food is cheaper than it was last year so perhaps they don’t feel the need.
* People in Turkey are the most likely to have made spending cuts in the last six months, with 77% saying they had done so.
* Over a third of Americans (34%) are stockpiling food ?just in case?. This is also happening in South Africa (36%) and Argentina (29%).
About the Synovate Economy and Prices May 2009 survey
The latest Synovate survey on economy and prices was conducted in May 2009 across 26 markets with over 17,300 respondents. The markets covered were Argentina, Australia, Belgium, Brazil, Bulgaria, Canada, Cyprus, Denmark, France, Germany, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, the Netherlands, New Zealand, Serbia, South Africa, Spain, Taiwan, Turkey, the UAE, the UK and the USA. For more information, please contact us.
Notes to editor
(1) The same questions were asked in November 2008 across 21 markets, some of which were different to the above. However, Synovate has looked at the 17 markets that participated in both waves to get a view of trends. The markets common to both surveys were Australia, Belgium, Brazil, Bulgaria, Canada, Denmark, France, Hong Kong, Japan, Malaysia, the Netherlands, New Zealand, Serbia, Taiwan, Turkey, the UK and the USA.
This news content was configured by WebWire editorial staff. Linking is permitted.
News Release Distribution and Press Release Distribution Services Provided by WebWire.