Australians have the highest consumer confidence of all developed nations, new research shows, with more people spending money on home improvements, decorating or new technology.
The Neilsen Global Survey of Consumer Confidence and Spending Intentions is based on a survey of more than 28,000 consumers in 56 countries, including Australia.
The confidence of Australian consumers increased in the last quarter for the first time since July 2010, yet it fell in 60% of the 56 markets surveyed.
Of the developed nations surveyed, Australia, Norway and Canada are the three most positive. Not surprisingly, European countries account for eight of the 10 most depressed markets.
With regard to job prospects, more than half (53%) of the Australians surveyed believe employment opportunities are either good or excellent, compared to 42% of global respondents.
Additionally, 59% of Australians think their personal finances will improve over the next 12 months, compared to 52% of global respondents.
Chris Percy, managing director of Neilsen Pacific, says while retailers will be hoping that increased consumer sentiment translates into more sales, he is still predicting a challenging year.
“The RBA’s surprise decision to keep rates on hold may weigh on future consumer sentiment, particularly with all of the major banks raising their mortgage rates independently of the RBA’s judgement,” he says.
With regard to discretionary items, 50% of Australian consumers believe the next 12 months will be a good time to spend money, up 7% on the previous quarter.
However, Australian consumers are still putting money away for a rainy day, with 44% signalling they will put discretionary money into savings, while 34% plan to pay off debts.
But in a positive sign for the retail sector, almost one quarter of Australians will be putting money towards home improvements, decorating or new technology – an increase on the previous quarter.
In contrast, the money people are looking to spend on new clothes remains stagnant at 23%, while 12% of respondents indicate they have no spare cash.
“When it comes to people’s two major concerns, these remain the same around utility bills and the economy,” Percy says.
“Interestingly, concerns around food and fuel prices dropped when compared to the previous quarter, which could partly be due to pricing activity from the major retailers.”
The survey found 70% of Australian respondents are trying to save on gas and electricity bills in order to cut down household expenditure.
The rise of private label products is also set to continue, with 61% indicating they have switched to cheaper grocery brands to save money.