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Consumer confidence slumps

Consumer confidence slumps

Now where is Malcolm hiding? We think he should be around to share the joy of a sour business environment mostly caused by recent lousy government. Funny how a major political event that created such euphoria for almost a year only generated a few bucks for poof marriage licences. The faecal touch in practice!

Australian consumer confidence has been hit hard by a combination of rising mortgage rates and political instability. The Westpac-Melbourne Institute consumer sentiment index tumbled three per cent in September. 

However, the survey was still marginally optimistic, with the index at 103.6. A reading above 100 represents positive sentiment, with the higher the number the greater the optimism.

Source: ABC

Consumer confidence slumps after taking hit from interest rates and political instability

It was the most downbeat reading since November last year.

“The detail suggests that confidence has been affected by increases in mortgage interest rates, political instability and household budget pressures,” Westpac chief economist Bill Evans said.

However, Mr Evans said it was likely there was a partial offset from the strong growth figures which were announced during the survey period last week.

The slide in consumer sentiment tracks a similar fall in business confidence over the same period.

Pressure on household finances mounting

The survey of 1,200 consumers was taken in the wake of the Liberal Party leadership spill and after three of the four big banks raised their standard variable mortgage rates.

There was added pressure from petrol prices hitting a five-and-a-half year high above $1.50 per litre and the ASX falling 2 per cent over the month.

While all components of the survey deteriorated in September, the largest fall was reported in the “Economic Outlook, next 5 years” sub-index which fell almost 6 per cent.

Views on family finances were also noticeably weaker, particularly in households with a mortgage.

Mr Evans said the impact of the leadership change was apparent in diverging sentiment responses across voter groups.

“Whereas those identifying as Coalition voters reported a 6.4 per cent fall, ALP voters recorded a 4 per cent rise. Those without a stated preference reported a 6.6 per cent drop in sentiment,” Mr Evans said.

Consumers are also adopting a decidedly risk-averse stance about their finances.

“Nearly 64 per cent of consumers still favour safe options — bank deposits, superannuation or paying down debt,” Mr Evans said.

“Only 12 per cent nominated real estate and 8 per cent nominated shares, the mix largely unchanged from June and March.

{ 7 comments… add one }
  • DT 13/09/2018, 6:08 am

    Consumers are mourning the loss of the Point Piper Hillbillies, that’s the problem isn’t it.

    Light at the end of the dark tunnel created by Rudd, Gillard, Rudd Labor 2007-2013 was sighted when the first LNP Budget was announced in May 2014 for financial year 2014/15 with a budget repair plan spanning the forward estimate years ahead of 2014/15. In September 2015 Manson was installed by Black Hands.

    Economic vandalism restarted.

  • DT 13/09/2018, 6:15 am

    More migrants are needed (sarcasm) to boost the economy by increasing demand for infrastructure and government services the nation cannot afford without more debt to pay for it but the economic stimulus would be wonderful wouldn’t it.

    What tax revenue is collected is already falling short of expenditure as the continuing budgets in deficit indicate, but more migrants on welfare paid with more debt would also be economic stimulus, of course.

    And how about even more surplus to requirements public service employee unionists on the payroll, more borrowed money to pay them but they too offer economic stimulus and they pay taxes, albeit not real tax, but they do return part of the public purse monies they are paid with.

    And pay businesses to shut down for days at a time when electricity is unavailable and domestic voter consumers might become angrier if the lights go out in homes, another way to get the nation moving backwards.

    • Pensioner Pete 13/09/2018, 6:53 am

      DT: Much like the ‘credit card loop’, where one obtains a credit card to pay off another credit card to pay off another credit card to pay off another credit card, Ad infinitum.

      • DT 13/09/2018, 7:23 am

        That’s right PP.

        Another that annoys me is net debt, gross debt is what is owed and what interest is paid against. To deduct other assets from debt owning is ridiculous.

        I often say that if I had $50 in my wallet and I borrowed $100 I owe $100 not $50.

  • Bushkid 13/09/2018, 7:05 am

    Well, when you’ve got governments that insist on legislating energy policies that are guaranteed – indeed designed – to kill off business and drive up electricity prices, is it any wonder that citizens begin to cut back on other spending in order to meet the bills?
    When that happens, is it any wonder that businesses begin to lose confidence in their ability to continue operating?
    When that happens, is it any wonder that people with jobs worry that they may not have one next week, and so curtail their spending?
    And why would anyone feel any more confident knowing an ALP/unions/greens government, whose idiotic policies are only guaranteed to be worse, may be inflicted upon us within the year?

    Gee, who’d have thought that the UN/IPCC/CAGW bullish*t would have such a negative effect? (I mean, besides those of us who’ve been paying attention all along.)

    • DT 13/09/2018, 7:25 am

      And what about paying businesses with taxpayer’s monies to stop operating when electricity supply is insufficient to keep voter’s homes energised?

  • Maryanne 13/09/2018, 8:39 am

    A formal education is indeed a cretinizing process. People don’t lack confidence; they lack money.

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