Australian consumers are the gloomiest they have been in three years.
The Westpac-Melbourne Institute measure of sentiment fell by 5.7 per cent in December.
The index reading of 91.1 points was the lowest score since August 2011.
Westpac’s chief economist, Bill Evans, said it was a very disturbing result.
"The index is now at its lowest level since August 2011 when it briefly fell below 90," Mr Evans said. "Prior to that you have to go all the way back May 2009 to see a period when the Index printed consistently below today’s level."
"Respondents may have been particularly unnerved by media references to an ‘income recession’" Mr Evans said, as national incomes declined and overall economic activity contracting in the quarter in every state apart from NSW.
The Australian economy grew at a much slower-than-expected pace in the third quarter as the slump in capital spending dragged on growth, according to official data.
The weak reading in the September quarter national accounts also dragged down the index, said Mr Evans, which showed the economy had "been limping along" at a 1.6 per cent annualised growth pace for the last six months.
“Respondents are clearly concerned about the outlook for the economy and job security. In addition there is ongoing disillusionment about the May Budget, six months after it was announced."
The survey also recorded the most negative responses on news recall in decades, with respondents assessing news items to be extremely unfavourable on topics such as economic conditions, budget and taxation and employment.
Mr Evans said they received the most negative responses on news recall since March 2001 on economic conditions, September 1986 on budget and taxation, and December 1975 -- the beginning of the survey -- for employment.
“These readings are almost certainly an overreaction but do highlight significant risks to spending, particularly over the course of the next few months," Mr Evans said.
This news story is reprinted from www.businessspectator.com.au
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The Westpac-Melbourne Institute measure of sentiment fell by 5.7 per cent in December.
The index reading of 91.1 points was the lowest score since August 2011.
Westpac’s chief economist, Bill Evans, said it was a very disturbing result.
"The index is now at its lowest level since August 2011 when it briefly fell below 90," Mr Evans said. "Prior to that you have to go all the way back May 2009 to see a period when the Index printed consistently below today’s level."
"Respondents may have been particularly unnerved by media references to an ‘income recession’" Mr Evans said, as national incomes declined and overall economic activity contracting in the quarter in every state apart from NSW.
The Australian economy grew at a much slower-than-expected pace in the third quarter as the slump in capital spending dragged on growth, according to official data.
The weak reading in the September quarter national accounts also dragged down the index, said Mr Evans, which showed the economy had "been limping along" at a 1.6 per cent annualised growth pace for the last six months.
“Respondents are clearly concerned about the outlook for the economy and job security. In addition there is ongoing disillusionment about the May Budget, six months after it was announced."
The survey also recorded the most negative responses on news recall in decades, with respondents assessing news items to be extremely unfavourable on topics such as economic conditions, budget and taxation and employment.
Mr Evans said they received the most negative responses on news recall since March 2001 on economic conditions, September 1986 on budget and taxation, and December 1975 -- the beginning of the survey -- for employment.
“These readings are almost certainly an overreaction but do highlight significant risks to spending, particularly over the course of the next few months," Mr Evans said.
This news story is reprinted from www.businessspectator.com.au
Read more details on outsource accounts payable
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