September 27, 2017

NAB Consumer Behaviour Survey: Q2 2017

Insights into the mindset of Australian consumers – their anxieties around future spending and savings plans, what drives these concerns and how they are impacting actual spending behaviours and financial hardship.

Australians less worried about job security according to NAB data.

In new data released today by NAB Economics, costs of living are the biggest causes of anxiety, while Australians are less worried about job security according to NAB’s Consumer Anxiety Index.

The cost of living (64.2 points) still weighs most heavily on consumers, and also highlights the big disconnect between low levels of economy-wide inflation and consumer focussed costs. More than one in five (22 per cent) consumers reported ‘high’ levels of concern over the cost of living.

In contrast, job security (41.9 points) caused the least stress, which likely reflected strong employment growth in the first half of the year and improved labour market conditions also seen in NAB’s Business Survey for some time.

NAB Chief Economist Alan Oster said low anxiety helped drive positive spending behaviours and while more consumers spent on essentials (particularly utilities), fewer cut back on non-essentials such as dining out at cafes and restaurants, staying at hotels, and buying theatre and concert tickets.

“When it comes to what people are actually spending on, we noted a big increase in the number of consumers spending more on ‘essentials’, particularly utilities and groceries,” Mr Oster said.

“Consumers cutting back on ‘non-essentials’ still out-weighed those who spent more, but the number that cut back in Q2 2017 fell in all spending categories – especially eating out, personal goods, travel and home improvements.

Mr Oster also recognised that the Index – which measures concerns about future spending and savings arising from job security, health, retirement, cost of living and government polices – rose slightly in Q2 2017, reversing the trend of falling anxiety since mid-2015.

“Overall consumer anxiety is still well below levels reported at the same time last year (60.2 points) and comfortably below its long-term average (60.8 points),” Mr Oster said.

“This reflects heightened concerns about health, cost of living and government policy, which offset lower worries relating to retirement funding and job security.”

Overall, 7 in 10 (70 per cent) consumers reported ‘low’ or ‘very low’ levels of anxiety over their job security. As a result, anxiety levels relating to job security now sits at a new survey low.

Broadly speaking, around one in two consumers said they would be prepared to spend “much less” on most of their lifestyle purchases – particularly on things such as taxis, Uber, and take away food.

Fewer Australians overall experienced financial hardship in the past three months – just 31 per cent in Q2 2017 (or around one in three people) down from 38 per cent (around four in 10) in Q1 2017.

Being unable to pay a bill was the most frequently cited cause of hardship – for 16 per cent of Australians overall, but for over one in five (22 per cent) middle aged Australians and for one in four (24 per cent) lowest income earning Australians.

Almost one in two surveyed said utility bills (electricity, gas, water, and phone) had the biggest impact. Around one in four also said inefficient savings, grocery bills and low pensions and/or other benefits also impacted their current financial position.

About the NAB Quarterly Consumer Behaviour Survey

The NAB Consumer Behaviour Survey (formerly the NAB Australian Consumer Anxiety Index) was launched in April 2013 in conjunction with the NAB Australian Wellbeing Index with the aim of assessing perceptions of consumer stress and wellbeing.

The NAB Australian Consumer Behaviour Survey provides a subjective assessment of over 2,000 Australian’s own concerns about their future spending/savings plans based on their job security, health spending, financial security for retirement, cost of living and government policies.

The NAB Consumer Behaviour Survey is complemented by the NAB Australian Wellbeing Index which provides a snapshot of how more than 2,000 Australians perceive their own lives based on life satisfaction, life worth, happiness and anxiety.

For further details, please see the attached documents.