Consumer confidence is dipping with the recent interest rate denting confidence, shows the latest Sensis Consumer report. Australians are now more concerned about interest rates than workplace relations.
The Sensis survey found that consumer confidence had fallen sharply this quarter, due largely to concerns about the cost of living and rising interest rates. Interviews were conducted with 1500 Australians during August and found that this quarter nearly four times as many people said they were worried because of rising interest rates.
Last week, the Roy Morgan Consumer Confidence Rating hit its lowest point for 2007 – the September rating is 118.3, down 6.9 points from August and 4.8 points below the 2007 average of 123.1.
The fall in the Roy Morgan Consumer Confidence Rating is largely driven by a downturn people’s perception of their own personal financial situation. Currently fewer Australians, (33%, down 7%) say their personal financial situation is better now than it was last year, while 27% (up 4%) say they are now worse off.
Pollster Gary Morgan says that although consumer confidence has fallen, it is still high. “People still feel that Australia is heading in the right direction.”
Meanwhile, conditions in the manufacturing sector softened only slightly on the September quarter, despite the August interest rate hike and global credit market turmoil, according to the Westpac-ACCI Survey of industrial trends released this morning.
According to the index, activity fell 0.6 points lower to 56.4 in September from 57.0 in June, leaving the index at its second highest level since December 2004.
But the survey also found unit cost pressures reaccelerated, capacity utilisation remains historically high, and perception of the labour market tightness rose, with stronger wage growth expectations.