The NAB has just released its quarterly consumer anxiety index which shows that while Australian households are not as anxious as the immediate post budget period, anxiety does remain elevated.
The index fell to 62.3 from 64.5 in Q2 2014 and still above the 61.7 experienced earlier this year in Q1.
In many ways this index is the flipside of the consumer confidence and sentiment indices from Westpac and ANZ. The behavioural economist in me sees this as a valuable adjunct to the current information that consumer confidence is below its long run average.
Indeed this index shows that there is a big impact of anxiety on consumer spending patterns with discretionary spending largely being pushed aside as essentials dominate. Likewise the fact that consumers are anxious about funding and financing themselves in retirement conveys a clear message that elevated anxiety in the Australian economy could be becoming a structural issue.
The NAB ads that other areas of high anxiety are “providing for the family’s future, health costs and worryingly, the ability to raise $2,000 in an emergency.” Here’s the list:
This data is an important window into the pysche of Australian consumers and business is unlikely to like what they see.
It stacks up to an economic outlook where the Australian transition from mining-led growth to other sectors could take longer than the RBA might be currently factoring in.