‘Sentiment fragile’: Consumer stress rising amid lack of economic clarity

Consumer stress is on the rise again amid a lack of clarity over the path ahead for the slowing economy, elevated price pressures and interest rates, according to a fresh National Australia Bank survey.

The bank on Tuesday revealed its consumer stress index resumed its upward trend in the three months to June following a modest decline in the first quarter.

Cost-of-living pressures remain the foremost concern. And while strong employment has offset a total collapse in consumer spending, job security concerns, albeit low, are rising.

This added most to the uplift in overall consumer stress.

Tasmania recorded a sharp rise in overall stress and was the highest in the country by some margin, particularly due to cost of living, health and retirement funding concerns.

Among other States and Territories, stress remained elevated and was somewhat higher in Victoria, New South Wales and the Australian Capital Territory than in other parts of the nation.

Stress levels were lowest in South Australia and the Northern Territory.

“Sentiment is extremely fragile as consumers struggle to make sense of the path ahead, but Australians continue to make deliberate and considered spending changes,” NAB said.

“Consumers continue to respond to cost of living pressures by cutting back or cancelling spending in most areas.”

This included cutting back on eating out at restaurants, micro treats such as coffee, entertainment, car journeys to save fuel, holiday plans and food delivery services.

NAB in a separate survey released the same day also revealed financial stress among Australians had hit its highest in eight years and trending well above the long-term average.

While Australians were a little more satisfied with their lives and reported a marginally higher sense of their life worth in the second quarter, they were somewhat more anxious — the fifth consecutive quarterly rise.

“Household stress associated with mortgages, rent & housing costs, personal loan repayments, children’s education, providing for family’s future, major household items and home improvements and maintenance continued to grow in the June quarter,” NAB said.

Wellbeing was highest and improved most in WA, while it also lifted in Queensland, South Australia and Northern Territory. It remained lowest in Tasmania and fell most in Victoria.

NAB also said Australians were more pessimistic about their savings in the next 12 months, with a higher number now expecting their savings to decrease than increase.