One in four Australians refuse to spend less on lifestyle purchases: NAB
The latest NAB Consumer Anxiety Index shows consumer anxiety has eased with fewer Australians choosing to cut back spending on non-essentials.
According to the Index, one in four have refused to spend less on lifestyle purchases with young people as reluctant to cut back spending than the middle aged.
The Consumer Anxiety Index measures concerns about future spending and savings factoring in job security, health, retirement, cost of living and government polices. It fell to a survey low 55.9 points in Q1 2017 (58.7 in Q4 2016).
Alan Oster, chief economist, NAB Group, said lower anxiety was reported across all survey measures in the March quarter.
"NAB’s measure of Consumer Spending Behaviour improved from -13 to -10, suggesting fewer consumers cut back their spending during Q1," he said.
“This was led by an increase in the number of consumers spending more on essentials and a reduction in the number of consumers cutting back on many non-essentials, especially home improvements, entertainment, travel and major household items.
“While stress levels arising from the cost of living and government policy also fell, around 1 in 4 consumers reported “very high” anxiety in relation to both these issues.
Consumers were also asked for the first time about their attitudes to “lifestyle spending” (e.g. holidays, coffee, eating out, etc.) and which of these they would be prepared to sacrifice in order to improve their financial position.
"While the majority of consumers are prepared to cut back lifestyle spending to improve their finances, almost 4 in 10 are not.
“Surprisingly, young people are no more willing to cut back lifestyle spending than middle aged consumers."
The index said areas where consumers were most prepared to spend “much less” include transport (taxis, Uber, etc.), take-away food, fitness and alcohol and least prepared to curb their spending on internet and mobile phones.
NAB expects consumption growth of around 2 percent in 2016-17 and 2017-18 and a modest improvement to 2.2 percent in 2018-19.
