Economic optimism plummets in May

by AB03 Jun 2013

Australians’ optimism about the future of the economy has slumped following last month’s Federal Budget, according to Allianz Australia Future Optimism Index.

The biggest fall in optimism occurred in Western Australia, which has traditionally been the most optimistic State, where the index fell from a national high of 23 in February, to nine in May.  This puts WA back among the levels experienced in NSW and Victoria (both with an index of seven).

Allianz says the fall in optimism is most marked among older Australians, particularly those aged 65 and over – and women, in general, are feeling less optimistic than men.

Allianz Australia managing director, Niran Peiris, says Australians began 2013 in a much more optimistic frame of mind when it came to their outlook on the economy.

“However, this has proved short-lived. After rising to a 12-month high in February, optimism about the future of the economy has slumped following the May Federal Budget. The biggest fall occurred in Western Australia, which has renounced its historical title as the most optimistic state and fallen back into the pack. Optimism among Queenslanders also declined markedly to be the only state to record a negative score.”

“Interestingly, despite a ‘Labor’ Budget, ALP voters recorded a much larger fall in optimism than their Coalition voting counterparts.”

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