Major bank shares sign Aussie households feeling financial pressure: 'It’s tough out there'
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In the wake of the global cost of living crisis, many Australians have been feeling the pinch, with some even resorting to lenders to make ends meet.
This alarming trend has caught the attention of major banks, who are now closely monitoring their customer data for signs of financial distress.
Jennifer, a single mum from Queensland, is one such individual who, despite being a high-income earner, has found herself relying on payday lenders to get by.
'People will do what they have to do [to feed the kids],' she said.
'I'll just pull money from wherever [financial intermediary] I can.'
The National Australia Bank (NAB) has been watching this issue closely.
Chief Economist Alan Oster revealed that the bank's internal data showed a worrying trend of flat consumption and increased use of money lending services.
'We're hearing stories about people going to payday lenders, cash converters—in other words, pawning stuff,' Oster explained.
'And so that says a lot of stress is there.'
'My big message would be: it's tough out there for the private sector.'
This comes in conjunction with the release of NAB's Monthly Business Survey (November 2023), which showed a significant drop in Australian business confidence.
The survey revealed a six-point fall to -9, which indicated a pessimistic outlook on the economy. This drop was reflected across various industries, but most tellingly, the retail sector saw a 16-point slump.
While business conditions declined four points to nine, they still remain above the long-run average.
However, not all financial institutions share NAB's concerns.
Australian Mutual Provident Society's (AMP) Deputy Chief Economist Diana Mousina suggested that while some households are indeed struggling, it's difficult to determine the exact percentage of households affected.
'I assume it's still a small portion,' Mousina said.
The Australian Bureau of Statistics (ABS) has also reported a decline in business turnover across industries heavily reliant on consumer spending.
This reflected the subdued economic activity of Australian consumers.
'Arts and recreation services reported the largest monthly drop in business turnover, falling 6.0 per cent, while travel agents and event ticketing businesses contributed to the 3.6 per cent fall for administrative and support services,' ABS Head of Business Statistics, Robert Ewing said.
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This alarming trend has caught the attention of major banks, who are now closely monitoring their customer data for signs of financial distress.
Jennifer, a single mum from Queensland, is one such individual who, despite being a high-income earner, has found herself relying on payday lenders to get by.
'People will do what they have to do [to feed the kids],' she said.
Major bank revealed that some households in financial stress resort to payday lenders and pawning. Image source: wayhomestudio on Freepik.
'I'll just pull money from wherever [financial intermediary] I can.'
The National Australia Bank (NAB) has been watching this issue closely.
Chief Economist Alan Oster revealed that the bank's internal data showed a worrying trend of flat consumption and increased use of money lending services.
'We're hearing stories about people going to payday lenders, cash converters—in other words, pawning stuff,' Oster explained.
'And so that says a lot of stress is there.'
'My big message would be: it's tough out there for the private sector.'
This comes in conjunction with the release of NAB's Monthly Business Survey (November 2023), which showed a significant drop in Australian business confidence.
The survey revealed a six-point fall to -9, which indicated a pessimistic outlook on the economy. This drop was reflected across various industries, but most tellingly, the retail sector saw a 16-point slump.
While business conditions declined four points to nine, they still remain above the long-run average.
However, not all financial institutions share NAB's concerns.
Australian Mutual Provident Society's (AMP) Deputy Chief Economist Diana Mousina suggested that while some households are indeed struggling, it's difficult to determine the exact percentage of households affected.
'I assume it's still a small portion,' Mousina said.
The Australian Bureau of Statistics (ABS) has also reported a decline in business turnover across industries heavily reliant on consumer spending.
This reflected the subdued economic activity of Australian consumers.
'Arts and recreation services reported the largest monthly drop in business turnover, falling 6.0 per cent, while travel agents and event ticketing businesses contributed to the 3.6 per cent fall for administrative and support services,' ABS Head of Business Statistics, Robert Ewing said.
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