Confidence in the economy weakens

Australian consumers are increasingly concerned about the economy and their personal finances, resulting in a drop in consumer confidence, according to Nielsen’s ‘Global Survey of Consumer Confidence and Spending Intentions’.

In the first quarter of this year, Australia’s consumer confidence index dropped to 89 points – six points down from quarter one of 2015 and seven down from quarter four, 2015.

The drop means Australia is now nine points below the global consumer confidence average of 98 and well below the US (110) and the Asia Pacific average (108).

In the fourth quarter of 2015, eight per cent of those surveyed in Australia said the economy was their biggest fear over the next six months. This has doubled to 16 per cent in the latest Nielsen results, indicating that the economy is now the greatest concern for Australians, overtaking terrorism, job security and increasing utility bills.

Only 51 per cent of online Australian consumers surveyed have a positive outlook on their personal finances, a drop of six percentage points compared with quarter one, 2015. This outlook also falls notably behind that of Asia Pacific (63 per cent) and below the global average of 56 per cent.

Nielsen Pacific CEO Justin Sargent says the declines in consumer confidence are a direct reflection of anxiety in Australia over the future of the economy and the state of people’s personal finances.

“Strong media coverage of uncertainty in the Chinese economy, speculation about housing bubbles, and instability as we head into an election have all undoubtedly contributed to this economic apprehension,” he said.

One in five interviewed in Australia said they had no spare cash, the highest figure since quarter two, 2014. Six-in-ten said they had changed their spending habits to save on household expenditure, such as cutting back on takeaway meals or out-of-home entertainment, looking for better deals on home loans, insurance and credit cards, and switching to cheaper alcohol and grocery brands.

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