Chinese consumers are looking to cut down on shopping and dining out, a Westpac MNI report said, as weak household finances and a pessimistic business outlook plummeted Chinese consumer confidence to its lowest levels since 2007 in October.

The Westpac MNI China Consumer Sentiment Indicator plunged 7.2% to 109.7 in October, after a fairly upbeat September, the report by the financial services firm said. Resilient consumer confidence has been one of China’s few bright spots as industrial and export sectors have slowed over the summer.

"When it comes to consumer sentiment this year, it’s been a case of up by the stairs, down by the elevator," MNI Indicators Chief Economist Philip Uglow said.

The drop in confidence was most acute among 35- to 54-year-olds, with a moderate decline among younger age groups, Westpac noted. Historically, younger buyers tend to be more optimistic than their middle aged peers.

Chinese consumer optimism had been rising since May, hitting a year high in September as urban households shrugged-off the volatilities of the Chinese stock markets, according to Westpac. Only 11 percent of the respondents of the survey had investments in the stock markets. The survey was conducted across 30 Chinese cities ranging from tier 1 to tier 3 cities.

However October’s slump shows more Chinese consumers are undergoing a reality check as the “discouraging state of the real economy” makes their jobs and incomes uncertain.

“There is no escape from the reality of an economy whose traditional growth engines are sputtering, thus threatening the outlook for jobs,” Westpac’s Senior International Economist Huw McKay said.

The survey follows China's GDP announcement last week, which showed the world's second largest economy grew by 6.9 percent in the three months through September, the slowest pace since 2009.