Jobs market concerns affect consumer sentiment
Businesses could find themselves facing difficulties over the coming weeks, as a leading indicator of consumer confidence posts a 5.7 per cent month-on-month fall in December.
The Westpac-Melbourne Institute Consumer Sentiment Index currently has a reading of 91.1 points, down from the 96.6 recorded in November. Although several factors have contributed to this result, it is in part down to fears about conditions in the labour market.
Westpac's Chief Economist Bill Evans commented: "This is a very disturbing result. The index is now at its lowest level since August 2011 when it briefly fell below 90.
"Prior to that you have to go all the way back May 2009 to see a period when the index printed consistently below today's level."
Mr Evans noted it might not be surprising that concern surrounding the labour market has escalated, especially given the uncertainty in the wider economy. The Westpac-Melbourne Institute Unemployment Expectations Index increased 4.4 per cent from November levels, indicating that more people believe the jobless rate will rise over the next 12 months.
"Apart from one higher print in March this year, this is the highest read since June 2009 when respondents were still traumatised by the global financial crisis," he added.
Some of these concerns may have been realised as the Australian Bureau of Statistics (ABS) released its unemployment data for November. This marked a rise of less than 1 percentage point from the previous month, bringing the total unemployment rate to 6.3 per cent.
With anxiety growing among consumers, businesses could find investing in productivity solutions is just what they need to thrive in 2015. Maximising the potential of an existing workforce could be the key to companies setting themselves apart from the competition and being able to make the most of any new opportunities that arise.