Sydney, 15 August 2016 – The confidence of Australian consumers has stalled according to Mastercard’s Consumer Confidence Index, taking a small dip of 0.2 points since the second half of 2015 to 42.2. Despite the dent, this was 2.7 points higher than in the first half of 2015, and 0.9 points above the average level of the index since the second half of 2011.
Mastercard Consumer Confidence Index is forward looking for the second half of 2016. The index measures five economic indicators – economy, employment, regular income prospect, stock market, and quality of life.
Some states were more pessimistic than others; the largest declines in consumer confidence were recorded in Brisbane (down 18.3 points, to 32.7) and Hobart (down 17.2 points, to 20.0). Consumer Confidence also fell in Adelaide (down 10.5 points to 23.1) and Sydney (down 2.2 points to 46.8). However not all states were sad about the next six months, those with a happier outlook included Perth (up 11.4 points to 37.6), Darwin (up 10.0 points to 20.4), Melbourne (up 9.5 points to 52.0) and Canberra (up 5.6 points to 54.3).
The overall decline in the index has resulted from deterioration in consumers’ perception of labour market conditions. The employment component of the report fell by 1.6 points to 37.4, partly reversing a 7.4 point increase in the second half of 2015. The regular income component also fell by 3.5 points to 56.1, and when it came to the economy, the index also dropped marginally (by 0.2 points) to 36.1.
Economist Saul Eslake says “The small dip recorded by the Mastercard consumer confidence survey for the first half of 2016 suggests that consumer perceptions of the Australian economy have remained largely unaffected over the last 18 months. Australians recognise that the ongoing performance of the economy has slipped since the ‘resources boom’ passed its peak five years ago, but that conditions have improved a little since late 2013/early 2014.
“Consumers are also particularly conscious that regular income growth isn’t what it used to be, but to counter this they also acknowledge that employment prospects have improved somewhat over the past couple of years.”
Despite the falls in three components of the report Quality of life was at its highest level since the second half of 2013, with an increase of 2.4 points to 40.3.
Mastercard SVP and Country Manager for Australia, Andrew Cartwright says, “While overall consumer confidence in Australia has had a marginal dip, it is great to see Australians purporting to be less pessimistic about their Quality of Life. This tells us that while Australians may have concerns over particular areas of the economy, they have renewed confidence those areas won’t necessarily negatively impact their personal life.”
Gender and Age
According to Mastercard’s Consumer Confidence index, confidence among men fell by 2.9 points, more than reversing a 2.3 points increase in the second half of last year. By contrast, confidence among women rose by 2.5 points, after a 4.3 point increase in the second half of last year.
Regardless of the point fall, consumer confidence continues to be higher among men than women – an inconsistency that is also evident in each of the five components of the index.
By age, the largest fall in confidence was among people aged under 30 with a 2.9 point decline, while the levels rose by 4.2 points among people aged 30-44, and 0.1 points among people aged 45 and over. Even with the fall, the level of confidence among people aged under 30 remains considerably higher than older people, as has been the case since 2005.
Australia in the Asia-Pacific region
Australia was one of seven (of 17) Asia-Pacific economies to record a decline in consumer confidence. Australia’s 0.1 point fall was the smallest decline, with much larger falls recorded in Indonesia (down 14.7 points), Hong Kong (down 12.4 points), Singapore (down 10.7 points) and Thailand (down 8.5 points).
Large increases in the level of consumer confidence were recorded in Taiwan (up 16.3 points), the Philippines (up 12.9 points), Malaysia (up 9.5 points) and India (up 7.5 points).
Mr Eslake says “Despite having the smallest drop in this report, Australian consumers remain less optimistic than their counterparts in most other Asia Pacific countries. The only countries where consumer confidence was lower than in Australia were (in descending order) Malaysia, Japan, Sri Lanka, Korea, Singapore and Hong Kong – all of which, like Australia, have experienced persistently ‘below-trend’ growth in recent years.
“By contrast, consumers in Myanmar, India, the Philippines, Vietnam and China are conspicuously more optimistic than Australian consumers – reflecting either their positive assessments of recent political changes in their countries, or their confidence regarding recent and future improvements in their living standards. Kiwis have also been noticeably more confident than Australian consumers since 2011, by a margin, which widened slightly in this report.”
Mr Cartwright says, “As a key trade partner and contributor to tourism dollars, China’s optimism is assuring. Australian businesses should be pleased to see that Chinese consumers remain confident to spend.”
About the Survey
The Mastercard Consumer Confidence Index is based on a survey conducted by IPSOS from June 2016 on 1252 respondents aged 18 – 64 across Australia.
Mastercard (NYSE: MA), www.mastercard.com, is a technology company in the global payments industry. We operate the world’s fastest payments processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories. Mastercard’s products and solutions make everyday commerce activities – such as shopping, traveling, running a business and managing finances – easier, more secure and more efficient for everyone. Follow us on Twitter @MastercardAU, @MastercardAP and @MastercardNews, join the discussion on the Cashless Pioneers Blog and subscribe for the latest news on the Engagement Bureau
Media Contact: Linda Kastanias| Lkastanias@webeshandwick.com |+61 2 9994 4406 or 0410 179 393
 The Mastercard Consumer Confidence Index score and the five components index scores range from 0 – 100 where 0 represents maximum pessimism, 100 represents maximum optimism and 50 represents neutrality.
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