Global consumer confidence low, India a bright spot: McKinsey report

Global consumer confidence is below its long-term average, indicating cautious spending worldwide, according to McKinsey. While most major economies show weak manufacturing, India remains a bright spot with strong, though moderating, growth.

Global consumer confidence continues to remain below the long-term average, signalling persistent caution in spending across major economies, while India stands out by maintaining strong, though moderating, growth momentum, stated a report by McKinsey & Company.

Global Consumer Confidence Remains Weak

The report noted that the global consumer confidence indicator sentiment has stayed under the long-term benchmark level of 100 through most of the period from 2010 to 2024. It stated "Consumer confidence remains below the long-term average, suggesting continued caution in spending". After some improvement last year, the index again slipped in 2025, reflecting uncertainty around economic conditions, elevated living costs in many countries, and a cautious approach by households.

The trend is consistent across major economies. Consumer confidence in the UK, Eurozone, US, China, Brazil and Russia remains below long-term averages. The weakening became more pronounced around 2022 and 2023 amid global inflationary pressures and tighter financial conditions. While some recovery has taken place since then, confidence levels are yet to return to historical norms, indicating continued restraint in spending behaviour.

Subdued Global Manufacturing Activity

Global manufacturing activity showed only modest improvement. The Global Manufacturing PMI stabilised at in September, pointing to mild expansion but highlighting fragile momentum. The services PMI stood at 52.8, signalling continued resilience but a slower pace of growth compared to previous months.

Most major economies reported subdued activity amid weak demand and trade-related headwinds. Manufacturing PMIs in September showed declines across the board: the US slipped from 53.0 in August to 52.0, the Eurozone from 50.7 to 49.8, the UK from 47.0 to 46.2, Brazil from 47.7 to 46.5, and Russia from 48.7 to 48.2. China recorded a mild improvement from 50.5 to 51.2.

India a 'Bright Spot' Amid Global Gloom

For India, the report stated, "Most countries saw subdued activity amid soft demand and trade headwinds; India remained a bright spot, maintaining strong though moderating growth" It shared that India's manufacturing PMI eased from 59.3 in August to 57.7 in September, still far above the 50-point threshold and among the strongest globally. The reading indicates sustained expansion and continued strength in domestic demand despite a slight moderation.

With global consumer sentiment yet to recover to long-term levels and manufacturing growth largely muted, the report outlined that the overall international outlook remains cautious. India, however, continues to provide a bright spot in the global economic landscape. (ANI)

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