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06 June 2005
Sydney
Results of a global study released today by research company ACNielsen found that Australian consumers’ expectations of the country’s economic performance over the next 12 months was the most pessimistic in the Asia Pacific, with 43 percent saying they felt the economy would deteriorate in the coming year compared to just 28 percent across the region. Thirty-four percent of Australians also felt the strength of the economy had deteriorated over the past six months.
The global consumer confidence survey, conducted online twice-yearly by ACNielsen, questioned over 500 Australian participants and more than 20,000 people in 38 countries around the world. Survey respondents were asked to indicate how they spent their spare cash once all essential living expenses had been covered; their thoughts on the country’s economic performance over the past six months and over the next 12 months; their greatest concerns over the next six months; and their confidence in the local employment market.
Australians ranked in the top five nations around the world (together with Greece, France, Italy and Germany) who thought their countries’ economies were likely to deteriorate.
Compared to the last round of results of the ACNielsen consumer confidence survey conducted in October 2004, the percentage of consumers who thought the economy had deteriorated had climbed from 13 percent to 34 percent, while the number who thought the economy would deteriorate in the year ahead was up from just 23 percent to 43 percent.
“Australia’s economy has experienced unprecedented growth and prosperity in recent years,” says Paul Richmond, Managing Director, ACNielsen Australia. “However, consumer sentiment seems to have turned and Australians are expecting tough times ahead, perhaps as a result of recent market speculations and commentary around trends such as falling real estate prices, rising oil prices and uncertainty in the stock market, as well as possible interest rate rises.”
Having accumulated one of the highest levels of personal debt in the developed world, Australians were focused primarily on reducing their debt and putting any spare cash into savings in preparation for the economic downturn they believe is coming. Asked to indicate how they spent any spare cash after essential living expenses had been covered, the majority of consumers (43%) said they used any spare cash to pay off debts, credit cards and loans. The second most common use of spare cash was savings, with 34 percent saying they put spare cash into savings accounts.
And while the majority of Australians thought their finances were in pretty good shape for the year ahead – 67 percent said the state of their own personal finances in the next 12 months would be good or excellent – they were split down the middle on spending, with 50 percent saying it was a good or excellent time to shop considering the cost of things today and their own personal finances, while the other 50 percent of the population rated the timing for spending as not so good or bad.
Looking ahead, Australians’ lack of confidence in the economy was reflected in their major concerns – the economy was rated by almost one in five Australian consumers (19%) as their biggest fear over the next six months. Other concerns for Australians were health and job security – 18 percent and 17 percent respectively – although when asked their thoughts on job prospects in the next 12 months, more than two thirds of survey respondents (69%) said they were good or excellent.
Looking outside the Australian market, consumer confidence across the Asia Pacific region had also taken a knock since the last time the survey was undertaken, with 33 percent saying their economy had deteriorated in the past six months. In contrast to Australian findings however, confidence moving forward was high, with the majority of respondents (38%) expecting that the economy would improve in the year ahead.
About ACNielsen
ACNielsen, a VNU business, is the world's leading marketing information provider. Offering services in more than 100 countries, the unit provides measurement and analysis of marketplace dynamics and consumer attitudes and behavior. Clients rely on ACNielsen's market research, proprietary products, analytical tools and professional service to understand competitive performance, to uncover new opportunities and to raise the profitability of their marketing and sales campaigns.
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