Consumer confidence in August plummeted to a new low, according to Nielsen’s Australian online consumer confidence survey.

For the first time since 2009, the survey revealed that Australia’s consumer confidence index has fallen below 100. It declined a further six points on the previous quarter’s score of 103 down to 97 points. Consumer confidence levels above a baseline of 100 indicate degrees of optimism and below 100 indicate degrees of pessimism.

According to Nielsen, the Australian consumer confidence has been steadily declining since the end of the third quarter last year. Despite the economy rebounding in the June quarter, Nielsen’s findings show that Australians were still feeling pessimistic prior to the release of Wednesday’s GDP figures.

The survey, which polled 1,500 online consumers, found that 60 percent of Australians thought that current business conditions were ‘tough’, with not much improvement forecast for the next 12 months. It was a similar picture for job prospects, with 55 per cent of consumers rating current job prospects as ‘not very good’, with no immediate upturn insight for the coming year.

When it comes to household income, nearly 40 per cent of consumers said they have less income than they had a year ago, with only a quarter stating that their household income had actually increased. Rising electricity/water costs continue to top the list of consumers’ financial concerns, with nearly a third citing this as their biggest worry. This was closely followed by rising food prices (20 per cent), not having enough savings (17 per cent) and the tax on carbon (15 per cent). 

“Our August interim Consumer Confidence Survey results show that Australians still believe they are not saving enough, even though their personal finances appear relatively healthy, so we’re likely to see consumers allocating even more cash to savings, while simultaneously trying to increase household cash reserves through expenditure reduction,” Chris Percy, Nielsen’s managing director – Pacific, Nielsen Consumer Group, said.

“With total household incomes rising only marginally, and with consumers continuing to put any spare cash into savings, the retailing industry is in for a very tough end to the year.”