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The weekly Roy Morgan Consumer Confidence Rating is 89.5 (down 4.7 points in a week) — the lowest it has been in nearly 17 years. Interviewing was conducted last weekend, October 11/12, 2008, after a week of the steepest falls in the history of the Australian All Ordinaries share-market index.

Now 49% (up 5% in a week) of Australians expect bad times financially during the next 12 months compared to only 14% (down 5%) of Australians expecting generally good times for the country.

In a major blow to retailers, Australians are closing their wallets with only 26% (down 3% in a week) of Australians saying that now is a “good time to buy” major household items and 43% (up 3%) of Australians saying now is a “bad time to buy.”

Australians are not confident about their family’s financial position in a year’s time with just 34% (down 4%) expecting to be better off financially this time next year while 23% (up 1%) expect to be worse off financially in a year’s time.

Looking further ahead, only 28% (unchanged) expect Australia will have continuous good times during the next five years compared to 26% (up 4%) that expect bad times for Australia.

Compared with this time last year 41% (up 3%) of Australians feel worse off, and only 26% (up 1%), are feeling better off.

Gary Morgan says:

“Last week’s massive falls in the Australian share-market have frightened Australians. Now 49% are expecting bad times for the Australian economy over the next year — the highest number since the recession of 1991-92.

“Only 26% of Australians say that now is a “good time to buy” major household items — the lowest mark since 1991-92. This is especially worrying for Australian retailers given the importance of the Christmas shopping season to their profitability and continued viability.

“This week’s Rudd Government stimulus package is a good start, but more is needed now. It is imperative for the Federal and State Governments to stimulate business with tax cuts otherwise both unemployed and ‘underemployed’* will jump from its already high 1.319 million.

“In addition the Reserve Bank must cut interest rates another 1% at each of its next two or three monthly meetings. It was a mistake for the Reserve Bank to continue to raise interest rates from last November, as we said in our paper — “Reserve Bank turns up the heat on Australian workers.” (Released November 9, 2007)

“These important measures will prevent the ‘World Financial crisis’ sending Australia into a painful recession. Kevin Rudd needs to provide real leadership or risk leading a one-term Government — the first since ‘Depression-era’ Prime Minister James Scullin.”

 

This special Roy Morgan Consumer Confidence Rating is based on 981 face-to-face interviews conducted Australia-wide with men and women aged 14 and over on the weekend of October 11/12, 2008.

The Roy Morgan Consumer Confidence Rating for Australia is now conducted on a weekly basis given its importance as an economic indicator.

*The ‘underemployed’ are those people who are in part-time work or consultants who are looking for more work. (Unfortunately the ABS does not measure this figure in their monthly unemployment estimate.)

For further information:

Gary Morgan:                    Office + 61 3 9224 5213           Mobile + 61 411 129 094

Michele Levine:                  Office + 61 3 9224 5215           Mobile + 61 411 129 093

Margin of Error

The margin of error to be allowed for in any estimate depends mainly on the number of interviews on which it is based. The following table gives indications of the likely range within which estimates would be 95% likely to fall, expressed as the number of percentage points above or below the actual estimate. The figures are approximate and for general guidance only, and assume a simple random sample.  Allowance for design effects (such as stratification and weighting) should be made as appropriate.

Results for the Roy Morgan Consumer Confidence Rating* for the component questions over the more recent surveys are as follows:
2008		Jan	Feb	Mar	Apr	May	June	July	Aug		Sep	Oct		Nov	Dec
									2/3	30/31		4/5	11/12
Interviews		1,027	994	1,176	1,121	1,186	1,081	999	1,075	1,042	1,057	1,183	981
Q1 Would you say you and your family are better-off financially or worse off than you were at this time last year?
Over the past year	better off	33	35	30	29	27	22	28	25	27	28	25	26
	worse off	25	25	30	34	35	45	40	43	39	39	38	41
QUESTION 1 difference		8	10	0	-5	-8	-23	-12	-18	-12	-11	-13	-15
Q2 This time next year, do you and your family expect to be better-off financially or worse off than you are now?
	better off	39	40	39	37	32	31	35	35	36	38	38	34
	worse off	16	17	17	22	27	31	29	25	22	22	22	23
QUESTION 2 difference		23	23	22	15	5	0	6	10	14	16	16	11
Q3 Thinking of economic conditions in Australia as a whole. In the next 12 months, do you expect we'll have good times financially, bad times or some good and some bad?
	good times	38	36	32	25	26	22	19	18	24	25	19	14
	bad times	25	30	30	37	39	39	48	48	37	38	44	49
QUESTION 3 difference		13	6	2	-12	-13	-17	-29	-30	-13	-13	-25	-35
Q4 Looking ahead, what would you say is more likely, that in Australia as a whole, we'll have continuous good times during the next five years of so - or we'll have bad times - or some good and some bad?
	good times	35	37	33	29	29	26	26	25	31	30	28	28
	bad times	18	20	20	24	26	26	33	28	23	21	22	26
QUESTION 4 difference		17	17	13	5	3	0	-7	-3	8	9	6	2
Q5 Generally, do you think now is a good time - or a bad time - for people to buy major household items?
	good time to buy	52	46	39	33	34	33	36	32	32	35	29	26
	bad time to buy	20	23	29	35	36	38	32	40	32	30	40	43
QUESTION 5 difference		32	23	10	-2	-2	-5	3	-8	0	5	-11	-17
Roy Morgan Consumer Confidence Rating		118.6	115.8	109.5	100.1	97.1	90.7	92.0	90.1	99.3	101.2	94.2	89.5
* The Roy Morgan Consumer Confidence Rating is 100.0 plus the simple unweighted average of the difference between the percentage of respondents who give a favourable and those who give unfavourable answers to five key questions.

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