Three times more people are planning to spend less on gifts than planning to spend more. (AAP: Lukas Coch)
Retailers look set for an unhappy Christmas, with consumer confidence turning negative and three times as many people looking to cut gift spending as those planning to spend more.
- Consumer confidence falls 1.7pc to 99.7, meaning pessimists outnumber optimists
- Almost a third of people plan to spend less this Christmas, only 11pc plan to spend more
- Views on household finances and the economy have deteriorated
The latest Westpac-Melbourne Institute survey shows consumer sentiment fell to 99.7 in November, back below the 100-point level that indicates where optimists equal pessimists.
Westpac’s chief economist Bill Evans says last month was the only one over the past year where optimists have been in the ascendancy.
“Overall, the consumer mood has been downbeat in 2017 with clear pressures on family finances and an uncertain economic outlook weighing on sentiment,” he wrote in the report.
“Economic uncertainty again featured in November, likely affected by the ‘citizenship saga’ impacting Federal Parliament.
“The ‘economic conditions, next 12 months’ sub-index fell 6.2 per cent, unwinding most of last month’s strong rise.”
There was further bad news for consumer finances today, with wage growth remaining near record lows at just 2 per cent per annum.
With most households feeling worse off than they were a year ago, and now also less optimistic about the future, the survey showed that three times as many people plan to cut spending on Christmas gifts as increase it.
“Just under a third of Australians expect to spend less on gifts this year than last, with 54 per cent expecting to spend about the same and just 11 per cent spending more — the lowest proportion since we began running this question in 2009,” Mr Evans said.
“Overall the net balance of ‘more minus less’ is marginally more negative than last year, suggesting we’re in for a repeat of last year’s lacklustre Christmas spend.”
Beyond Christmas trinkets news only gets worse for retailers, with the “time to buy a major household item” sub-index falling 3.3 per cent and stuck well below its long run average, suggesting customers are not just being stingy with family and friends but also pulling back on buying things for themselves.