Vijay Parekh, president, American Express International Consumer Card and Small Business Services group noted that the high levels of confidence reflected in the survey were consistent with the trends he has been seeing in American Express' international business indicators.

“Consumers, especially the affluent, seem to be showing more confidence. We are seeing it in their spending and travel patterns,” Parekh said.

The survey — which also asked consumers about their favorite indulgences and how they would spend an unexpected “windfall” of $30,000 — charted some striking differences among the attitudes and habits of top-earning households in Australia, Canada, Italy, Mexico and United Kingdom. For example:

Australians love the outdoors: traveling, sports and eating out. However, they are quite conservative on financial matters.

Canadians say they like to spend on property and home improvements. Over the next year, however, they intend to spend more on dining out and going out for entertainment. However, many expect to reduce their spending on health and fitness.

Italians were the least optimistic, and do not consider themselves indulgent.

Mexicans were, by far, the most optimistic of those surveyed; they enjoyed traveling the most, and indulged in buying clothes.

The British love to travel, and intend to do even more of it over the next year. Eating out is near the top of their list of indulgences, far more than any other group of respondents.

Overall Themes: Financial Optimism, High Interest in Travel and Fiscal Conservatism

Financial Optimism
In Australia, Italy, Mexico and United Kingdom survey participants were asked if they thought that their households' finances would be “significantly better/better/about the same/worse/or significantly worse” a year from now.

An extremely high number of affluent respondents said they expected things to remain the same, get better or significantly better: 95 percent in the UK; 94 percent in Mexico; 92 percent in Australia; 82 percent in Italy.

The Mexicans were the most optimistic. Among Mexicans surveyed, 72 percent, said they expected their finances to be “better” or “significantly better” over the next year. The next most optimistic group were the British at 52 percent and the Australians at 49 percent, The Italians were the least optimistic with only 21 percent expecting to be better off or significantly better off over the next year.

High Interest in Travel
Leisure travel was the hands-down winner among affluent respondents' favorite indulgences. Categories included clothing and accessories; holidays/pleasure travel; special interests such as sports, hobbies; dining out; going out for entertainment; entertaining at home; decorative and/or practical household goods; and home improvement.

When presented with the same categories and asked where they expected to increase spending over the next year, respondents from most countries again put leisure travel first.

“Consumers, particularly affluent ones, clearly have a strong interest in traveling for holiday and pleasure,” said Parekh. “This area has been depressed somewhat over the past few years. The survey shows there is pent-up demand and may be an important indicator of better times to come for the leisure travel industry.”

Fiscal Conservatism
Although they are optimistic about their financial futures and expect to increase their spending in the coming year, respondents also tend to be conservative about their finances. This was evident in their responses to a question on how they would use a surprise windfall of $30,000.

• Across all five countries, very few would actually spend the fantasy money outright. By a huge margin, most would save, invest or pay down debts: 90 percent in Australia, 83 percent in Canada; 79 percent in Italy, 73 percent each in the UK and Mexico.
   
• “Savers/Investors”— More specifically, 71 percent of Mexican affluents said they would save/invest the money; as would 63 percent of Italians, 52 percent of Australians, 47 percent of Canadians, and 46 percent of British.
   
• “Debt payers” — About one-third of Australians and Canadians and 27 percent of British affluents would use the money to pay off debts (compared to only 16 percent in Italy and 2 percent in Mexico).
   
• “Spenders” — Very few survey respondents said they would spend the money outright. (The British were the highest “spenders” at 21 percent, followed closely by Italy at 20 percent, Mexico at 18 percent, Canada at 14 percent. Australia was last with 9 percent).

Country Snapshots

The five countries were selected because of their importance to American Express as well as their geographic and cultural variety. Below are some highlights of the findings from each country.

Australia
Australian affluents feel good about their future finances, like to get out of the house any way they can — traveling, hobbies, eating out — and spend on clothes. They intend to keep spending in these areas. Financially, they are more conservative than these patterns might suggest — more would use a windfall to pay off debt than in any other country. They are also big savers, not interested in spending a windfall, and certainly not in the stock market.

• Australians are optimistic about their households' financial future: 92 percent of the highest-earning households expect to do the same or better in the coming year and 49 percent think their financial condition will improve or significantly improve over the next 12 months.
   
• Although Australians rate themselves quite high in most indulgences, hobbies/special interests (65 percent), clothing (68 percent), and holidays/pleasure travel (68 percent), are among the most popular forms of indulgence.
   
• They like to dine out. At 60 percent, this rating was less than the British, but twice that of the Italians (29 percent), and a bit more than the Mexicans at 50 percent. As with the British, affluent Australians (45 percent) fully intend to increase their already high level of travel over the next 12 months. A quarter say they will spend more on special interests (29 percent) and clothing (27 percent).
   
• Ninety percent of top third Australian households said that they would use a $30,000 windfall to save, invest, or reduce debt. At 38 percent, Australia had the highest “pay off” score of any market. 52 percent would save; only 9 percent would spend the money outright; 6 percent would invest in the stock market.
   
• “Australian affluents have very active social lives, as reflected in their love of eating out, travel, and indulging in special interests,” said American Express Australia Senior Vice President and Country Manager John Steward. “Despite this trademark characteristic, the survey demonstrates that this pleasure seeking does not come at a cost, as most Australians seek to reduce their debt-to-income ratio (which has recently climbed to an average of 126 percent) and save for the future.”

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Canada *
Canadian affluents did not consider themselves indulgent. Their highest category of indulgence was in property and home improvements, at 42 percent.

Future spend: Canadians planned to spend more money outside the home over the next year — outside entertainment was expected to be up 47 percent; dining out, up 46 percent.

Interestingly, while 30 percent will increase spend in health and fitness, 54 percent will spend less.

Financial priority is paying off debt: Over a third (34 percent) of Canadian surveyed said their financial priority for the next year was paying off mortgages or other debt.

Italy
Italian affluents were the least optimistic about their near-term financial future. They like to spend money on the home, do not see themselves as indulging in clothes or accessories, and overall, rated themselves as far less indulgent than did consumers from other countries. They do plan to increase spending over the coming year, however, particularly in travel, home improvement and clothing.

• Of those surveyed Italians were the least optimistic about their near-term finances. While 82 percent of them expected their income to “remain the same/increase/significantly increase”, only 21 percent expected it to increase or significantly increase, (This compares, for example, to Mexico — where 72 percent saw themselves as significantly optimistic).

Indulgences:

• Overall, far fewer Italians indicated areas of indulgence than did respondents in other countries.
   
• Almost three quarters of Italian respondents say they do NOT indulge in clothing and accessories.
   
• Only 43 percent of Italian affluents put “holiday/pleasure travel” on their lists of favorite indulgences, while most countries' affluents put that category at the top of their lists (81 percent in Mexico, for example, 76 percent in UK, 68 percent in Australia).
   
• While most countries respondents put household goods spending at the bottom of their indulgence list, for Italians (and Canadians), home spending was near the top of their list of indulgences. A quarter of Italians say they like to spend extra money on practical goods (27 percent) and a third say they like to spend extra on home improvements (38 percent).
   
• While Italian affluents today spend in more practical categories, they plan to increase spending across the board over the next year, especially in leisure travel (42 percent), clothing ( 35 percent) and home improvement (38 percent).

Windfall:

Among highest “windfall spenders”: As noted above, relatively few of the respondents surveyed from any country said they would spend a windfall outright. But 20 percent of Italian responders said they would spend it, the highest percentage, matched only by the UK . (Compare this to Australia with only 9 percent).

Most Italian affluents, 63 percent, would save or invest the windfall money, and 16 percent would pay off debt.

“Italians have a more balanced sense of life than people in many other countries, and the survey reflects this,” Massimo Quarra, American Express regional president in Southern Europe said. “Italian affluents have great taste; they eat, dress and live well, they are culturally attuned and they love to travel. They don't consider these things indulgences. They love to entertain and enjoy their homes.

“The economic pessimism in the survey reflects a concern with the current state of the economy. Italians like to save their money by, putting it in capital goods. They tend to avoid debt. Therefore it makes sense that they would be less interested in paying off debts with a windfall.”

Mexico
Survey results show Mexican affluents to be highly optimistic about the future. They see themselves as indulgent, love to buy clothes, but also have a highly pragmatic side. They are most likely to invest a $30,000 windfall in tangible assets, rather than the stock market or to pay off debt. Over the next year, most will increase spending on items related to the house — either decorative or practical items. They will also spend more on dining out, and travel.

The most optimistic of all the countries about near-term financial prospects, 94 percent of top-earning Mexican households believe their financial condition will be “the same/better/significantly better” in the next year. 72 percent say they feel it will be better or significantly better. (This is far ahead of the next market in this “committed optimist” category, which is the UK at 52 percent).

Almost half of the affluents (48 percent) are likely to invest a $30,000 windfall in property, business or other such opportunity. 20 percent would save it. Very few (3 percent), would invest in the stock market, and only 2 percent would pay off debts.

Mexicans ranked themselves high in most indulgence categories, with more than 50 percent saying they like to indulge in 8 out of the 9 categories.

The “clothing and accessories” category was the most popular form of indulgence (85 percent), by far the largest of any country, followed by holidays/pleasure travel (81 percent).

While high income Mexicans are very optimistic about the future and rank themselves high in most indulgence categories, their future spending plans are far more practical. Fifty-eight percent of respondents will spend more on decorative household goods, 57 percent on practical household goods, 34 percent on travel, and 43 percent on dining out. Only 16 percent said they expect to spend more on clothing.

“The survey results reflect Mexicans' optimistic spirit, even in the aftermath of a very difficult decade,” said American Express Mexico Senior Vice President and Country Manager Mario SanMiguel. “Mexicans are well-rounded, enjoying life while at the same time investing sensibly for the future. Mexican affluents are careful with their money and avoid borrowing, which is why in the survey they show little interest in using a windfall to repay debt. Mexicans are traditional and family-oriented, yet like to travel and experience new cultures.”

United Kingdom
The British affluent picture is one of optimism, and perhaps a few surprises. They are a group that likes to travel more than anything and fully intends to keep up the pace. They lead the list in liking to spend extra to eat out. They show themselves as savers, not investors. Yet, neck-in-neck with the Italians, they lead the list of those who would spend a fantasy windfall.

95 percent of British affluents believe their household incomes will remain the same, get better or improve. Over half (52 percent) said they thought it would improve or significantly improve. This puts British “committed optimists” in the middle of the group, well ahead of Italy, but behind Mexico, and on a par with Australia.

Seventy-one percent of well-to-do British indulge in dining out, more than twice that of the Italian affluents (29 percent) and the Mexicans (50 percent).

The British affluents like holiday/pleasure travel (76 percent). They show no signs of slowing down, either-in the next 12 months, 38 percent say they will spend more; 88 percent say they will spend as much or more.

Save, invest or spend a windfall? Almost half, 46 percent, report they would save/ invest a windfall of $30,000. Slightly over a quarter, (27 percent) would pay off debts, only 6 percent would invest in the stock market but 21 percent would spend the fantasy money.

According to Debra Davies, Vice President, Head of UK ICSS, “The study does away with many of the stereotypes surrounding the British. It shows that the British affluents lead the way among the Europeans in knowing how to enjoy themselves and spend their money.”

The survey was conducted by telephone between April 24th and June 3rd as part of an omnibus study by Jigsaw Research and polled more than 5,000 heads of household, age 16 and older, in Australia, Canada, Italy, Mexico and the United Kingdom. The margin of error is plus or minus 3 percent.

Affluent consumers are defined by their household's relative rank in terms of income. In Australia affluents were defined as being in the top third of households; in Italy and the U.K. the top quarter and in Mexico the top 15 percent.

American Express Company is a diversified worldwide travel, financial and network services company founded in 1850. It is a world leader in charge and credit cards, Travelers Cheques, travel, financial planning, business services, insurance and international banking.

Note: The Canadian survey used somewhat different wording on several questions; therefore the results included are somewhat limited.