NAB survey shows Australian consumer anxiety is at highest level in 3 years

National Australia Banks’s consumer anxiety index spiked to 62 points at the end of 2018, showing that consumer anxiety was the highest in 3 years.

NAB’s Australian consumer anxiety index provides a measure of how anxious consumers are that their savings will be impacted in the future.

The survey found that consumer nxiety was mostly stemming from high levels of indebtedness and slower income growth in Q4 2018.

NAB group chief economist, Alan Oster said, ‘Anxiety increased most over the cost of living, and despite a healthy labour market, concerns over job security also climbed to its highest level since mid-2016'.

Last year’s Q4 survey found that consumers overall needed an extra $207 a week to ease their household’s cost of living, varying depending on income, gender, family status and location.

While this year, household finances, and retirement were the biggest worry, followed by raising an average of $2000 for emergency medical costs.

‘Against this background, almost four in 10 Australians said they had experienced some form of financial hardship last quarter, the highest in two years.’ Mr. Oster said.

Women most anxious about financial hardship

The survey shows women were the most affected, between the ages of 18-29, as well as low income earning households. Their concerns mostly stemmed from not being able to pay bills and financial hardship.

NAB’s survey has previously shown how consumer anxiety impacts spending behaviours. It finds that how consumers feel doesn’t always translate into how they’re spending.

Mr Oster said, in Q4 2018 consumers say they’re cutting back on non-essential things like travel, eating out and entertainment.

Household spending remains a concern

While household spending stilll one of the main causes consumer anxiety, recent statistics have shown December retail sales fell by 0.4%, leaving price-adjusted turnover for the quarter at just 0.1%.

Oster says, spending on "essentials" is still mainly driven by utilities, but less so than in the previous quarter.

Last quarter the study found more consumers faced some form of financial stress or hardship during Q4 2017, with financial stress over paying bills causing consumers the most anxiety.

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