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Category: Retail / Consumer Finance / Economic Trends / Business, Economics and Finance

Australians setting up for 'lukewarm' Christmas spend: Westpac

Tuesday, 22 Nov 2016 15:10:36 | Thuy Ong

Westpac says the biggest pull back in spend were among young people and those on low incomes. (AAP: Joel Carrett)

A new survey shows a more downbeat Christmas period as six out of seven Australians expect to spend the same or less on gifts over the season than last year.

The Westpac-Melbourne Institute Consumer Sentiment survey points to less money being spent, but found plans are still in "slightly better shape" than other post global financial crisis years.

Christmas spending plans v a year ago Photo: People planning to spend more this year has fallen. (Source: Retail Council, Westpac-Melbourne Institute)

On the index scale, the 2016 reading is 79.9, a drop from 87.0 in 2015. Westpac said this year looks to be roughly consistent with a 1.5 to 2 per cent year rise in per capital spending.

"With population growth tracking at 1.4 per cent per year, total sales will likely be up about 3 to 3.5 per cent a year, a 'so-so' year compared to the 5 per cent gain in 2015," Westpac said.

Of respondents to survey, 34 per cent plan to "spend less", 52 per cent "the same", and 14 per cent said "more".

"Over the entire 42-year history of the survey, the sentiment lead-in to Christmas 2016 is in the middle of the pack," the report said.

"A long way above the bleak recession years in the early-90s and early 80s and deeply unsettled GFC year in 2008, but also a far cry from the 'golden' years in the mid-80s, the early to mid-2000's and the post GFC bounce in 2009."

The biggest cooling off this year compared to last was in New South Wales, while spending plans are higher in Victoria, South Australia, Queensland and Western Australia.

"That said, spending plans in SA and the mining states are tracking at markedly weaker levels than in New South Wales and Victoria," the report said.

"The biggest pull back have been among 18 to 34-year-olds, those on lower incomes, and females."

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