Signs of Life for Consumer Outlook

The all-important marketing barometer of consumer confidence levels may just be turning if several polls out this week are right and the expectations of social researchers take hold.

Consumer sentiment is still way off its highs of 2010/11 but Dr Rebecca Huntley, executive director of Ipsos Consumer Insights and Social Trends and author of the Ipsos Mackay Report, said the outlook from consumers has picked up this year.

The Westpac-Melbourne Institute’s consumer confidence index, released yesterday, rose 3.4 points for July to hit 99.1 – the best reading since February. And this week Roy Morgan’s Consumer Confidence Rating also lifted, up 1.8 points.

“I’ve been saying for the last couple of months that consumers could not sustain the levels of pessimism they had last year,” Huntley told AdNews. “2011 seemed to be a low point. We were feeling when we went into this year there would not be a greater dip or greater concentration of pessimism. Australians might still be pissed off with government and a little more cautious about job security but they’re now feeling better than the rest of last year. There is some potential for some pent-up optimism and pent-up consumption.”

Roy Morgan chairman Gary Morgan echoed similar views earlier this week. “The improvement in consumer confidence was driven by increasing numbers of Australians saying they expect to be better off financially this time next year and also that they are better off financially than this time last year,” he said.

As welcome as the small trend improvements are, there was caution all around about the need for industry to remain pragmatic about the implications. “You’ve got to be careful about reading too much into the polls,” Huntley said. “They fluctuate. The broader things keeping consumers from spending and expressing contentment are not going to change overnight. They’re still concerned about job security, government and the international economy. We will need to see some of those things change before we see consumer confidence rise and build and indicate a pattern, as opposed to a fluctuation.”

Still, Huntley said a number of major clients were preparing to act quickly on improving confidence when it was apparent that a trend shift was underway. “Really good businesses don’t have a siege mentality,” she said. “They want to know what they can do. Clients see an opportunity around how they can tap into this slightly more optimistic view. You get the sense some brands are already doing that. CommBank’s ‘Can’ campaign is a big example of that.”

This article first appeared in the 13 July 2012 print edition of AdNews.

One Comment

  1. The thing that frustrates me most about the Europe and USA crisis is
    a) it’s almost entirely a confidence problem
    b) the popular press are only interested in reporting negativity
    which just perpetuates the situation.

    The European bank just lowered its internal ‘parking’ rate to 0% to try to get the banks to liquidate a trillion dollars they have amassed – yes that’s $1,000 billion which should be in the system in the form of investments! However the banks just moved ~$600 billion to other more preferable accounts.It has had no effect, but would have cost the central bank a fortune to do this.

    It’s such a waste of time tinkering with the banking system when the populace is being simultaneously told it’s all still doom and gloom.

    What I want to see is the governments spend money instead on solving the root issue – confidence. Perhaps by charging a Negativity Tax and issuing Positivity Awards to the press to encourage them to look for the good things in the world not the sad.

Leave a Comment