Consumers are prioritising spending on new clothes, entertainment and technology, according to a Nielsen survey, which shows consumer confidence rose by eight points in the third quarter.
The Nielsen Global Survey of Consumer Confidence and Spending Intentions measures consumer confidence, major concerns and spending intentions among more than 29,000 internet consumers in 58 countries, including 516 internet consumers in Australia.
According to the survey, Australian consumer confidence rose by eight points in the third quarter to 98, fuelling hopes for a positive Christmas period.
“[This] will be great news for many retailers and counterintuitive to what most are saying in the market,” Nielsen Pacific executive director Michael Walton says.
“The previous quarter saw a lot of noise around the impact on cost of goods, rising electricity prices and job losses as a result of the carbon tax.”
But according to Walton, these negative predictions never materialised.
“With the recent interest rate cuts, consumers appear to be feeling more positive about their prospects overall,” he says.
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“Our conversations with retailers and manufacturers… are now increasingly focusing on these green shoots of growth, and the variety of steps they can take to leverage this opportunity.”
“This includes a tighter engagement with new products.”
When asked about their thoughts on their job prospects in the coming 12 months, half of Australians said they were “good” or “excellent”.
The same amount was also positive about their personal finances.
When they’re not saving, more than one in five of the Australian consumers surveyed prioritise spending on new clothes, out-of-home entertainment and technology, Walton says.
“With the launch of the new Windows 8 platform, plus a raft of new tablet devices, there are good signs for technology retailers,” he says.
However, the survey also highlights the impact of rising utility bills. For 40% of the Australians surveyed, electricity, gas and heating prices are a major concern.
This is the 10th consecutive quarter where rising utility bills have been consumers’ biggest concern.
“Other markets… rate political stability, welfare and employment far higher on the list of cost of living pressures, [but] in Australia it’s the everyday cost of living pressures that occupy our minds,” Walton says.
“Electricity prices alone have risen by an average of 35% across Australia during the past three years.”
“Almost half of all Aussies are opting to put spare cash after living expenses into savings, signalling they’re saving for a rainy day.”
The Nielsen findings come on the back of the latest NAB survey, which shows business conditions improved in the third quarter.
By industry, the largest improvements were in retail and manufacturing, which were among the weakest performers in the previous survey.