Despite regular reports of doom and gloom, Australians have the highest consumer confidence of all developed nations, according to Nielsen.

In its latest consumer confidence findings, the confidence of Australian consumers increased in the last quarter for the first time since July 2010, while it fell in 60 per cent of the 56 markets surveyed globally.

Of the developed nations surveyed by Nielsen, the most positive countries after Australia are Norway and Canada. Not surprisingly, Europe, which is struggling with the Eurozone debt crisis, accounts for eight of the 10 most depressed markets including Greece, Italy, Portugal, France and Spain

Chris Percy, managing Director of Nielsen Pacific, said while Australians still seem to be cautious, we have seen an uplift in consumer confidence in the last quarter.

“Reports of low retail spending are still concerning, but we hope, or the retailers will hope, that this increased consumer sentiment will begin to translate into better results for retailers as 2012 progresses, although we still predict a challenging year ahead for the retail sector,” he said.

“The RBA's surprise decision to keep rates on hold may weigh on future consumer sentiment, particularly with all of the major banks raising their mortgage rates independently of the RBA’s judgement, in a bid to protect profits.”

When it comes to buying discretionary items, exactly half (50 per cent) of Australians thought the next 12 months would be a good time to spend money – up 7 per cent  on the previous quarter. While this may seem low, globally only 32 per cent believed the next 12 months would be a good time to buy items.

The survey also revealed Australians are still putting money away for a rainy day, with 44 per cent  signalling they will be putting discretionary money into savings and one-third (34 per cent) paying off debts. These figures are relatively stagnant when compared with previous quarters.

In a positive sign for the retail sector, almost one-quarter of Australians will be putting money towards home improvements, decorating or new technology – an increase on the previous quarter. However, the money people are looking to spend on new clothes remains stagnant at 23 per cent, and 12 per cent of respondents indicated they have no spare cash.

 “Nielsen undertakes a quarterly global survey reviewing a range of factors to determine national confidence levels, including consumers’ general outlook with regards to the economy, but also specific predictions around spending habits,” Percy sai.d

“When it comes to people’s two major concerns, these remain the same around utility bills and the economy. Interestingly, concerns around food and fuel prices dropped when compared to the previous quarter, which could partly be due to pricing activity from the major retailers.”

The Nielsen survey found that more than two-thirds (70 per cent) of Australians are trying to save on gas and electricity bills to cut down household expenditure. The rise of private label products is also set to continue, with 61percent indicating they have switched to cheaper grocery brands to save money.