- NAB's Consumer Anxiety index is down to levels not seen since mid-2019
- An improving employment market and job security are helping
- Strong online sales are continuing
NAB‘s latest ‘Consumer Anxiety Index’ has fallen to its lowest level since mid-2019, a full eight months before the pandemic hit.
As property markets are taking off around the country, many buyers will be anxious about missing out (FOMO), but overall consumer sentiment is moving in a positive direction in Australia.
The anxiety index fell to 55.6 points in the final quarter of 2020, down from 57.0 and 57.7 a year earlier.
The reasons behind this decline (or put it another way, higher consumer confidence) are due to improvements in the employment situation, job security, the ability of the health system to cope and a good deal of faith in local economy.
The things that are making consumers nervous are grocery and utility cost increases, plus worry over any future COVID outbreaks, associated with more lockdowns and forced returns to work from home.
“While consumers are feeling less anxious, less worried about COVID-19 and less concerned about the economy, they are continuing to embrace some new purchasing attitudes and behaviours that emerged during the height of the pandemic,” said NAB Head of Behavioural & Industry Economics Dean Pearson.
The survey found that Australian consumers are being more mindful where they spend their money, are more likely to research brands and products before purchasing and where possible, are switching to less expensive products to save money.
Consumers are still showing some reluctance to visit major shopping centres, although this is improving slightly.
“Consumer support for local businesses also remains strong, presenting opportunities for Australian SMEs to capture share as consumers embrace community shopping”, said Mr Pearson.
Online purchasing behaviour continues to be strong, including for items previously purchased in store.
“While it remains unclear to what extent these new behaviours become entrenched, the rapid evolution of digital looks set to continue”, said Mr Pearson.
Overall, consumers are becoming more careful, informed, more sophisticated and more demanding in their shopping interactions and are likely to be less tolerant of sub-standard shopping experiences, both digital and in-store.
Source: NAB AUSTRALIAN CONSUMER ANXIETY SURVEY Q4’20; published February 2021