News of China's slowing economy has started to affect the public's psyche, as Chinese consumer confidence fell to its lowest level in more than three years.

The Westpac MNI China Consumer Sentiment Indicator dropped by 2% in October to 110.9 from 113.2 the previous month - a tenth of a point shy of its record low of 110.8 set in September 2011. That seems to reflect China's third quarter GDP results, which came in a 7.3%, the lowest growth rate in five years.

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There was a significant drop in all five components that make up the Westpac MNI China Consumer Sentiment Indicator. "The rout in confidence was across the board with consumers' views turning increasingly negative across most of the wide range of sentiment measures," Westpac said in its index report.

The job market outlook continued its downward slide as the Employment Outlook Indicator fell for the fifth consecutive month, and now sits at its lowest level since February of 2009.

"While the Chinese authorities have been at pains to emphasize the stability in the labor market, the weakness in our employment component tells a different story and is a growing source of concern," Chief Economist of MNI Indicators Philip Uglow said.

"With consumer confidence close to record lows it suggests the authorities will maintain their attempts to underpin growth via continued selective easing."

Although there were several measures taken to try to stabilize the struggling real estate market, the outlook worsened again in October with the House Buying Sentiment falling to the lowest for two years, while expectations for house prices over the coming six months declined for the fourth consecutive month.

"The Q3 GDP data highlighted that growth is currently dependent upon exports, with

domestic demand extremely subdued. Consistent with that, this survey has been reporting a lack of confidence in the household sector since late in the June quarter," said ,Westpac's senior international economist.

"As a consequence we continue to argue that a further easing of the policy stance is warranted, notwithstanding the nationwide housing package delivered on September 30. The survey detail argues that a mix of sector specific and macroeconomic measures will be required before the housing market returns to a durable growth trajectory."

TagsWestpac MNI China Consumer Sentiment Indicator, Philip Uglow, Huw McKay