With the extended period of interest rate cuts slowly putting positive effects of the economy’s growth, massive job cuts in Australia’s motor vehicle and manufacturing industries have shaken the nation’s consumer confidence.
Consumers are especially concerned about job security amid a falling level of spending confidence.
A joint consumer sentiment survey from Westpac and the Melbourne Institute show consumer confidence falling back to levels seen mid-2013 after healthy gains stimulated by low interest rates.
Consumer confidence was recorded at 10 per cent lower than November last year.
To coincide with the figures, official data shows there were no increases in new home loans in January, despite the record low interest rates.
Analysts had expected the new home loan figures to rise by 0.5 per cent.
The Australian Bureau of Statistics however, did report this week that the proportion of first home buyers did edge up slightly to 13.2 per cent after being rock bottom late last year at 12.3 per cent.
With thousands of job losses at Ford and Toyota, ending the car manufacturing and related industries in this country and massive job cuts in other sectors and companies such as QANTAS, confidence surrounding job security that can impact consumers’ spending decisions is being noticeably affected.
The figures suggest most consumers expect unemployment to rise further this year rather than fall.