Australia: Consumer Anxiety Index fell to 59.2 points in Q3 - NAB

Research Team at NAB, notes that the Australian consumer anxiety falls to its lowest level in more than 3 years, but women aged 30-49 are struggling.

Key Quotes

“The NAB Consumer Anxiety Index fell to 59.2 points in Q3 2016 (60.2 in Q2 2016) to its lowest level in more than 3 years.

According to NAB Group Chief Economist Alan Oster: “Consumers felt less stressed about their jobs, government policy and the cost of living, with anxiety related to their health spending and retirement funding unchanged”.

The cost of living, along with government policy, is still the biggest driver of overall consumer anxiety. But with low inflation persisting, cost of living anxiety fell to its lowest level since the Survey began in early 2013.

“It was pleasing to see just 1 in 4 Australian consumers now reporting “high” anxiety over their cost of living, compared to more than 1 in 3 in mid-2014” said Mr Oster.

Women were far more anxious than men, particularly those aged 30-49 who were also the most anxious across all demographic groups.

Despite lower levels of overall anxiety, consumer spending behaviours are still very conservative and dominated by spending on “essentials” such as paying down debt, utilities and medical expenses.

“On a positive note, however, we have loosened our purse strings a little with fewer consumers cutting back on non-essential spending” said Mr Oster.

Australians were also less anxious in regards to their current financial position, with all drivers of household financial stress causing less concern.

“Men were better placed than women in all age groups to meet their basic living expenses and unforseen expenses. Having a higher income also helps a lot” said Mr Oster.

Looking forward, NAB expects moderate but easing household consumption growth over the next few years, with real household consumption growth forecast to average around 2.7% for 2016, before slowing to 2.1% in 2017 and 2.3% in 2018.”