Economic gloom in Australia

It's getting a little ugly out there in economic terms. The Chinese economy continues to slow as forecast, while Greece's exit from the Euro seems increasingly certain. A global survey of consumer sentiment by the Boston Consulting group shows that consumers in western countries continue to want to save more, spend less.

Interestingly, the Australian results mirror those in other countries even though this country is doing much better in relative terms. I quote from the linked story in the Melbourne Age: 

Almost half (47 per cent) of Australian consumers feel they are in financial trouble or not financially secure, up from 36 per cent a year ago. This is equal with the US, higher than in the UK (45 per cent) and higher than all other developed countries surveyed except Italy and Japan.

Job security has also become a much greater concern. Among local consumers, 22 per cent feel very insecure or somewhat insecure in their current job in the next year, up from 17 per cent a year earlier. This matches the level of job insecurity in France, and is only marginally behind the US (23 per cent).

The survey found that the percentage of all consumers saying they will spend less on discretionary items in the next year increased from 47 per cent in 2011 to 50 per cent in 2012.

This is higher than in the US (46 per cent), the UK (47 per cent) and level with the average of the major European economies surveyed.

The Australian results seem to have come as a surprise. They shouldn't have. It's not just the economic gloom and doom reporting. The now large proportion of the Australian workforce in casual or contract employment do feel under threat, as do a proportion of those in full time "long term" employment in sectors undergoing cut backs. People have to consider both the stability of current work and the degree of difficulty in gaining alternative employment. 

I know that I have written on this one before, but the rise of casual and contract employment has had very significant impacts on the way people think, feel and act. One very simple side-effect is the way people now need more cash reserves as a protective buffer. They will try to limit their spend until they have built savings to the point that they once again feel moderately safe.

And who could blame them?

While I haven't tried to monitor the coverage in any scientific way, there has been a marked rise in pieces in the Australian media centred round the theme "how to keep your job". People are insecure and it's not an irrational fear, just a recognition of current realities that hold regardless of your form of employment.