By Andrew Starke
According to the results of an interim Australian Online Consumer Confidence Survey, Australian consumer confidence declined over August to the lowest levels since early 2009.
Conducted by research house Nielsen, the survey found consumer confidence dropped from 103 in July to 97 last month, with levels above a baseline of 100 indicating degrees of optimism and below 100 indicating degrees of pessimism.
Australian consumer confidence has been in steady decline since the end of quarter three (September) last year and it is no real surprise that consumers are now more pessimistic than ever about the health of the local economy.
Despite the economy rebounding in the June quarter, the survey, which polled 1,500 online consumers, found that 60 percent of Australians thought that current business conditions were ‘tough’, with not much improvement forecast for the next 12 months.
It was a similar picture for job prospects, with 55 percent of consumers rating current job prospects as ‘not very good’, with no immediate upturn insight for the coming year.
When it comes to household income, nearly 40 percent of consumers said they have less income than they had a year ago, with only a quarter stating that their household income had actually increased.
Rising electricity/water costs continue to top the list of consumers’ financial concerns, with nearly a third citing this as their biggest worry.
This was closely followed by rising food prices, not having enough savings and the tax on carbon.
“Our August interim Consumer Confidence Survey results show that Australians still believe they are not saving enough, even though their personal finances appear relatively healthy, so we’re likely to see consumers allocating even more cash to savings, while simultaneously trying to increase household cash reserves through expenditure reduction,” said Chris Percy, Nielsen’s managing director – Pacific, Nielsen Consumer Group.
“With total household incomes rising only marginally, and with consumers continuing to put any spare cash into savings, the retailing industry is in for a very tough end to the year.”
Consumer confidence in the health of the federal budget is also slightly pessimistic, with over a third of consumers believing that the federal budget is in ‘bad shape’ and will not return to surplus in the next few years.