Health and consumer crisis: Europeans remain cautious

Ahead of the release of its annual edition scheduled for next February, L'Observatoire Cetelem wanted to take the pulse of nine countries by measuring the impact of the health crisis on morale and consumption dynamics. The study conducted by Harris Interactive in early September is therefore a snapshot taken between two lockdowns. It is nonetheless still indicative of the mood of the times, and equally significant of the resilience of each country, the individual behaviour of each citizen, and the different crisis management approaches in Europe.

Unsurprisingly, the morale of European households is falling overall although without this being a major decline. As is usually the case, the collective experience of the crisis is much more negative, throughout Europe, than the individual experience reported (-0.5 point and -0.1 point respectively). While there are significant variations from country to country, this appears to be due to several factors. The first is obviously due to the more or less sound management of the health crisis in each country, the second reveals the effectiveness of the social and economic support policies, and finally the third reflects good economic health, before the health crisis, of each of the countries.  It is around these three variables that the different downward trends in almost all the countries analysed are really played out. The European average score on the perception of the country's situation is 5/10.

The case of Germany is exemplary (5.8/10), and although the fall in confidence in relative value (-0.7) is significant, this is primarily due to a very high starting level of German confidence. Moreover, it is clear that the health impact was lower than in the rest of Europe during the first wave of the pandemic, and that the German economy was stronger.Conversely, Belgium appears to be one of the most affected countries in the world in terms of Covid-19 mortality, but paradoxically confidence levels in absolute terms remain high (5.3/10).

Spain, for its part, has a combination of difficulties in all three areas: original economic fragility, hesitant management of the health crisis and accompanying measures that are very difficult to finance in view of the country's economic and social situation (3.9/10).

Finally, France, which has chosen to protect the health of its citizens before the country's economy, remains below the European average (4.7/10).

The corollary of this perceived change in purchasing power in times of crisis is naturally, and almost mechanically, the return to individual precautionary principles, with a rise of savings everywhere. 78% of Europeans say they want to control their spending and save. With the exception of Portugal, where more than 9 out of 10 citizens wish to save more, almost all countries show savings intentions of around 75%.

This is one of the strongest indicators of the now increasingly cautious feeling of confidence. 

“This crisis, unprecedented in its nature and consequences, has generated a great deal of anxiety among Europeans. In addition, the lockdowns imposed in many countries have enabled Europeans to accumulate forced savings. In France, the Banque de France estimates that households will have accumulated additional savings of €130 billion in 2020. These savings will be a powerful lever for recovery when the health crisis is over.However, in a still uncertain context, we can nevertheless expect that some of these forced savings will be transformed into precautionary savings".

Flavien NEUVY, Head of L'Observatoire Cetelem explains.

With the exception of countries where purchasing power has been particularly protected (Sweden and Germany), all Europeans consider that, during this period of crisis, the share dedicated to food (34%) and housing (20%) has been largely preponderant (vs. leisure, clothing, etc).