Australian consumers are increasingly concerned with the economy and their personal finances, resulting in a drop in consumer confidence. In the first quarter of the year, Australians’ confidence dropped to an index of 89 points – six percentage points down from quarter one, 2015 and seven percentage points down from quarter four, 2015.
Australia is now placed nine percentage points below the global consumer confidence average of 98 and well below the Asia Pacific average (108) and the U.S. (110).
In the fourth quarter of 2015, 8% of Australians said the economy was their biggest fear in the next six months. This has doubled to 16% in the latest Nielsen results, making the economy the biggest concern for Australians; overtaking terrorism, job security and increasing utility bills.
Only half (51%) of the online Australian population have a positive outlook about their personal finances, a drop of six percentage points compared with quarter one, 2015. Australians’ outlook on personal finances also falls notably behind the Asia Pacific population (63%) and below the global average of 56%.
Justin Sargent, CEO of Nielsen in the Pacific said that the declines in consumer confidence are a direct reflection of Australians’ anxiety toward the future of the economy and the state of their personal finances.
“Fear of the nation’s economy has overtaken terrorism, job security and increasing utility bills to become the biggest concern for Australians. Strong media coverage of uncertainty in the Chinese economy, coupled with speculation about housing bubbles and instability as we head into an election have all undoubtedly contributed to this economic apprehension.”
Notable movements such as this in consumer sentiment, usually indicate that consumers will be either pulling back or adjusting expenditure. Indeed, only 42% of consumers believe it’s a good or excellent time to buy the things they want or need – down three percentage points since last year.
“We are already seeing Australians make changes to purchasing behaviours to save on household spending – it makes this an important time for businesses to stay close to shifting consumer wants and needs,” offered Sargent.
One-in-five (21%) Australians said they have no spare cash, the highest figure since quarter two, 2014. Six-in-ten online Australians said they have changed their spending habits to save on household expenditure such as cutting back on take-away meals; out-of-home entertainment; looking for better deals on home loans, insurance and credit cards; and switching to cheaper alcohol and grocery brands.
ABOUT THE NIELSEN GLOBAL SURVEY OF CONSUMER CONFIDENCE AND SPENDING INTENTIONS
The Nielsen Global Survey of Consumer Confidence and Spending Intentions was conducted March 1-23, 2016, and polled more than 30,000 online consumers in 63 countries throughout Asia-Pacific, Europe, Latin America, the Middle East/Africa and North America. The sample includes Internet users who agreed to participate in this survey and has quotas based on age and sex for each country. It is weighted to be representative of Internet consumers by country. Because the sample is based on those who agreed to participate, no estimates of theoretical sampling error can be calculated. However, a probability sample of equivalent size would have a margin of error of ±0.6% at the global level. This Nielsen survey is based only on the behavior of respondents with online access. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60% Internet penetration or an online population of 10 million for survey inclusion. The China Consumer Confidence Index is compiled from a separate mixed methodology survey among 3,500 respondents in China. The sub-Saharan African countries in this study are compiled from a separate mobile methodology survey among 1,600 respondents in Ghana, Kenya and Nigeria. The Nielsen Global Survey, which includes the Global Consumer Confidence Index, was established in 2005.