Growth, inflation and labour market all easing
Consumer stress rising again, but vaccination intentions more positive.
Consumer stress rose for the second straight quarter in Q2’21, led by growing concerns over government policy, funding retirement and costs of living, despite fears over job security falling to below pre-pandemic levels. Consumer stress remains highest in NSW, ACT and VIC, but rose most in WA. Stress among consumers on lower income remains noticeably higher across all measures, particularly cost of living (rent & utilities up most).
Household spending patterns and expectations for major purchases (outside of home renovations) were a little more conservative.
Encouragingly, vaccination intentions are more positive, with almost 8 in 10 Australians signalling an intent to be vaccinated or have already done so if eligible. Around 1 in 10 Australians are still unsure but this is down from almost 1 in 5 in Q1.
Against this background, consumer behaviours continue to point toward caution with being more mindful about where money is spent, switching to less expensive products, buying due to deals and researching before buying. That said, consumers are also more conscious of buying Australian-made and supporting local business.
With consumer stress rising again and an ongoing focus on value, whether consumers will pay more for local products in the longer term remains to be seen. But for now, businesses would be well advised to promote locally sourced and produced products where possible.
Get all the insights in the NAB Consumer Sentiment Survey Q2 2021
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