Commonwealth Bank launches Viewpoint: A report on the economic vitality of Australia
10 March 2010, Sydney: Commonwealth Bank, in conjunction with NATSEM (University of Canberra) today launched its inaugural economic vitality report, Viewpoint.
Created to act as a barometer of the economic health of the nation, and with analysis by NATSEM, a respected independent research institute at the University of Canberra, the first quarterly Viewpoint takes an in-depth look at the effect of the Global Financial Crisis (GFC) on Australian consumers by analysing the extraordinary volume of data managed daily by Australia’s largest bank.
Commonwealth Bank CEO Ralph Norris said: “As Australia’s leading financial services organisation, Commonwealth Bank is best placed to gain first-hand insights into how the Australian economy is faring. Almost one in two Australians bank with Commonwealth Bank, and we process almost 45% of the nation’s electronic transactions. Viewpoint uses this extraordinary volume of data to form an overview of the economic pulse of the nation, to help Australians make better informed financial decisions.”
Michael Blythe, Commonwealth Bank Chief Economist said the Australian downturn proved to be more in the nature of a slowdown rather than recession, however dependent on age group, the impact varied.
“Contrary to many perceptions, the GFC had a divergent impact across different age groups in terms of perception as well as income and spending patterns, including the effect on employment, disposable income and consumer confidence.”
Yet, despite being the most optimistic group, Viewpoint reveals Australians aged 18-24 years suffered more than most. Data shows this group experienced relatively higher unemployment, greater reliance on government support, and lower salary payment growth than other age groups over the period December 2008 to December 2009.
- By December 2009, one in six people in the labour force aged 15-19 was unemployed
- The decrease in full time employment from December 2008 to December 2009 was 0.5% for all Australians 15-64 years. However, for 15-19 year olds, the drop in full time employment was 8.9% - a staggering 18 times greater than recorded for the overall working population (ABS Labour Force Survey, January 2010)
“The state of the labour market prompted employers to hoard labour, which impacted upon recruitment. Additionally, older workers whose retirement savings had been damaged stopped exiting the workforce. The flow-on effect hit new entrants at the lower end of the age range disproportionately. And lower retirement rates meant fewer jobs were freed up for new, or younger, workers” Mr Blythe said.
Robert Tanton, Research Director at NATSEM, said: “The fact that older age groups showed greater increases in salary receipts than younger age groups suggests younger workers, with lower levels of skills and experience, may not be able to negotiate pay increases during a period of
economic downturn; or that younger workers are more likely than older workers to have their hours reduced.”
In contrast to the above, Viewpoint revealed that the effect of the GFC on Australians aged 30-64 years was mild, with increases in salary payments and card spending.
Mr Blythe explains: “Extreme pessimism and lower consumer confidence was relatively short-lived. A Commonwealth Bank survey a year ago on consumer perceptions which forms part of Viewpoint’s findings revealed significant fears that the economy was going down hill. However by early 2010 the majority of consumers thought the economy was already ‘strong’ or would ‘quickly get better’, facilitated by aggressive fiscal and monetary policy action, which worked quickly, and worked well.”
Viewpoint further reveals:
- Salary payments for the highest earning groups – those aged 35-44 and 45-54 – increased by 4.9% and 5.8% respectively
- Those with the highest increase were aged 55-64, where salary payments increased by 8.1%
Set to be released quarterly, Viewpoint provides timely insight and knowledge with information not previously available, utilising a confidential sample. In-keeping with our promise, ‘Determined to be different’, Commonwealth Bank will communicate findings to the nation, allowing a more intimate understanding of the economic vitality of Australia. Few reports match the breadth, depth, or timeliness of Viewpoint.
Viewpoint is available to download at www.commbank.com.au\viewpoint
For further information or to arrange an interview with Commonwealth Bank’s Chief Economist, Michael Blythe:
Public Relations Advisor
P (02) 9118 1784 / M 0421 323 278
Public Relations Advisor
P (02) 9118 1731 / M 0422 048 659
A three-pronged research methodology approach underpins Viewpoint.
1. Size: From a 10 million-strong customer base, Commonwealth Bank drew a confidential sample of 1.3 million households, and observed their income and spending activity. The sheer volume of data used as the basis for this report is unmatched in its depth.
2. Timeliness: With the ability to avoid the lag of traditional surveys, the findings are based on real time data that records the actions made each and every day by real people - allowing the prediction of future trends and the opportunity to act as an early warning indicator.
3. Depth: Numbers alone don’t tell the whole story, so the report is backed up by quantitative data, collected by speaking directly with 2,000 households each month to gain a better understanding of consumer perception and behaviour, based on the conditions households are experiencing and how or why their perceptions change. The findings are compared against conventional economic indicators produced by the Australia Bureau of Statistics to confirm the validity of the findings.