Anxiety levels among Australian consumers are increasing, and rising cost of living pressures are largely to blame.
The NAB’s consumer anxiety index rose to 63.5 points in Q2, up from 61.8 seen in the first three months of the year, with anxiety levels across all survey components bar government policy increasing during the quarter.
The survey “provides a subjective assessment of over 2,100 Australian’s own concerns about their future spending/savings plans arising from job security, health, retirement, cost of living and government policy. The index provides detailed results by: geography; age; income; employment status; occupation; sex; and marital status,” according to the NAB.
The table below shows levels of consumer anxiety by category. While cost of living pressures are causing the greatest concern for consumers, those relating to job security are also rising. According to the NAB, stress levels relating to the latter now stand at the highest level seen since early 2013. On the back of the federal budget released in May, the only component that saw anxiety levels decrease was that towards government policy.
NAB chief economist Alan Oster suggests the survey is indicative of a “still wary consumer”.
“More consumers are electing to pay off debt and are spending more on “essentials” like health, transport, utilities and groceries, while retirement funding and providing for the family’s future continue to cause the most anxiety with regards to households’ financial positions”.
That’s not very encouraging news, particularly given household consumption will likely need to accelerate to help the economy continue its rebalancing away from the mining capital expenditure boom. With stress over job security, retirement funding and cost of living pressures all building, it suggests that the outlook for spending, and indeed the broader economy, is likely to remain subdued for some time yet.
The levels of consumer anxiety by key category are shown below. Those with the highest levels of anxiety are shown in red.
Based on the survey findings, a low-paid, middle-aged divorced women with no kids living in a regional city in Tasmania working a part-time sales and clerical job who didn’t finish high school would typify the most anxious consumer in Australia at present.