Consumer confidence drops following floods
Consumer confidence has fallen dramatically this month in the wake of the flood crisis in Queensland, new research shows.
The Westpac-Melbourne Institute Index of Consumer Sentiment fell 5.7 per cent from 111.0 last month to 104.6 in January.
It means that consumer confidence is now down 12.9 per cent on a year ago and is eight per cent below its average level in 2010.
Westpac's chief economist Bill Evans said that while the survey was a difficult one to interpret given events in Queensland, the index still fell by 3.2 per cent when the state's results are excluded.
"The 'ex Queensland' index points to a significant fall in confidence across the country," he noted.
"Despite these other states not being directly affected by the floods in their major cities it is likely that perceptions of the implications of the floods for the national economy and their own financial positions have been adversely affected."
Consumers concerned by their current financial position could opt to compare debit cards and other money products in search of the best options. According to Mr Evans, the flood disaster is likely to delay the next official interest rate increase until the second half of 2011.
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