Shaky female confidence in economy hits spending

Women are less confident than men about the state of the economy, a mood that has impacted upon consumer spending, according to a new report.

The CBA’s latest Viewpoint report, based on a survey of 2,000 people, identifies four key drivers shaping the economic confidence of men and women: personal financial situations, family commitments, work-related factors and reactions to external factors such as the economy’s performance.

The report shows that in January 2011, 38% of men said the economy was strong, compared to just 21% of women.

Women are also more pessimistic about the future, with 24% believing the economy is going downhill compared to 21% of men.

CBA chief economist Michael Blythe says women are often more aware of their family’s finances – and are therefore more cautious – because they bear much of the responsibility for household money management.

Among those that follow a budget, 69% of women say they are mostly or always responsible for balancing the books, compared to 46% of men.

“This leaves many women more in tune with the reality of the family’s financial situation than men, and therefore influences their perception of how the broader economy is fairing.”

According to the CBA, the differences in gender sentiment may provide some insight into consumer spending patterns.

“Women tend to dominate retail spending and, given current spend levels are lower than trend, this may reflect the less positive perceptions of female shoppers,” the report says.

“In contrast, males typically account for a larger share of non-retail spending. Greater resilience evident in non-retail spending may reflect the more optimistic perceptions of male shoppers.”

Looking at data of 1.3 million of its customers – as a representation of the general population – the CBA found women account for 61% of department store expenditure and 56% of clothing and footwear.

Not surprisingly, women account for 53% of spending on food and groceries, while men are more inclined to purchase big-ticket items.

For example, males are typically more responsible for buying cars, and account for 60% of furnishing spending. Men also account for 54% of spending on recreation, and 59% of spending on fuel.

While men and women differ in their economic perceptions and spending habits, there is some common ground when it comes to greatest fears, with the previous Viewpoint survey showing men and women are both less worried about job security.

Blythe says concerns over the cost of living, specifically housing, have replaced fears of unemployment, suggesting discretionary spending will continue to crawl as other expenses are given priority.

“Worries about the ability to provide the necessities for families is a concern shared by men and women. It is an issue that is likely to amplify when the impact of the natural disasters across the country is realised,” Blythe says.