Global Financial Crisis Becomes Domestic

25 April 2009

Fear and uncertainty have all but wiped out optimism among Australian consumers, whose bleak mood about job security in this country is a sure sign that the Global Financial Crisis has now become a domestic crisis.

According to the latest Ipsos Mackay “Mind & Mood” report , by March this year not only have consumers lost any confidence they might have been clinging to as recently as February, many had also given up hope that a recovery is likely this year or in the near future.

The respected “Mind & Mood” report, that was developed by social researcher Hugh Mackay and has been conducted over 30 years, has found that the over-riding concern among Australians today is job insecurity. Instances of wide job losses among friends, workmates, neighbours and family members have intensified consumers’ anxieties and made them feel increasingly vulnerable about their own jobs.

The study shows that people’s increasing anxiety is being compounded by their inability to understand or predict just how bad things will become. Despite some consumers being aware of, or being able to remember, the recession of the early 1990s, they feel a strong sense that this worldwide crisis will be even worse.

This was not the case just three months ago, when the Ipsos Mackay “Living in Harder Times” study reported that consumers were generally adopting a ‘let’s be positive’ and ‘wait and see’ approach.

Now, however, they are accepting that the crisis is a reality and have stopped brushing it off as media hype.

Commenting on the “Mind & Mood” study findings, Ipsos Mackay Director of Research, Dr Rebecca Huntley said: “Since the beginning of the year the mood of Australians has completely changed

“Prior to this study, we found that unless consumers had actually lost their jobs, they felt confident and overall were quite positive about the future.

“This mood has now gone,” Dr Huntley said.

“It took consumers since last year to believe there was an economic downturn, it will take longer than expected to believe the economy will recover,” she added.

Other key findings of “Mind & Mood” included:

  • Many people are alarmed at the prospect of more Australian jobs going overseas – perhaps forever.
  • Consumers believe they are the ones thinking long term and acting strategically in the face of the GFC rather than government and business. Australians are questioning the government’s stimulus package as ineffectual and are critical of the government’s lack of vision; while CEO salaries and bonuses have enraged people.
  • Baby Boomers are feeling under growing pressure to juggle family and financial commitments, a situation exacerbated by the GFC. Many are also questioning the way they are parenting. On the other hand, Generation Y has demonstrated resilience and creativity in response to the GFC.
  • Despite the lack of consumer confidence rising anxiety about the economic downturn, one area where many Australians are still not planning to reduce their spending is technology. Our love of technology survives with consumers using it as a form of escapism and a coping mechanism, providing cheap entertainment of the face of the current bleak climate.

About Ipsos

Ipsos Australia is part of Ipsos worldwide, one of the world's leading survey-based marketing research firms listed on the French stock exchange. Founded and run by market research professionals, Ipsos interprets, simulates, and anticipates the needs and reactions of consumers, customers and citizens – locally, nationally and around the world. Ipsos has a direct presence in more than 50 countries globally and conducts research in more than 100.

About Ipsos Mackay “Mind & Mood”

“Mind & Mood” was based on a series of 16 group discussions with Australian men and women ranging in age from their early twenties to mid seventies. All participants were drawn from the upper-middle to lower-middle socio-economic strata. The fieldwork was conducted in Sydney, Melbourne, Adelaide, Port Macquarie, Bendigo and Port Augusta in March 2009.

For further information contact:

Amanda Ross
Access Public Relations
T: 02 9279 4133
M: 0414 987 327
E: Amanda@accesspr.com.au

Rochelle Burbury
Access Public Relations
T: 02 9279 4799
M: 0408 774 577
E: Rochelle@accesspr.com.au