Luxury consumers` spending has fallen to its lowest level in more than two years, and luxury consumer confidence has reached historic lows, according to a new survey conducted by Unity Marketing.

The firm`s Luxury Consumption Index, which tracked the buying preferences and spending patterns of more than 1,000 luxury consumers (average household income of $150,200, average age of 43.6) in an October survey, plummeted to 87.3 points, its lowest level since 2004, the firm said in a media release.

The amount spent by affluent consumers on luxury dropped 21 percent from an average $15,283 in the second quarter of 2007 to $12,142 in the third quarter, according to Unity Marketing President Pam Danziger.

The survey results also show that spending for personal luxuries, especially fashion accessories, jewelry and watches, has taken the hardest hit, while luxury consumers are more willing to spend on luxury experiences, including travel, dining, and spa or beauty services. Spending on such experiences rose 11 percent, the survey found.

Danziger said these experiences serve as more meaningful gratifications than normal luxury purchases.

The good news for luxury marketers is that at least one segment of the affluent market is continuing to spend. The super-affluents, those with a household income of $150,000 or more, spent about the same as they did in the second quarter, according to the survey. Those with an upper-middle income (household income of $75,000-$100,000) and lower-upper income (household income of $100,000-$150,000) cut back on their spending.

"The conventional wisdom is that the affluent market is unaffected by the economic ups and downs that impact the average consumer," Danziger said. "But today the affluent market is far more diverse and stratified than it historically ever has been. That means luxury marketers need to understand the segments within their target market and develop marketing strategies that clearly differentiate the priorities and passions of these different segments."

According to Thomas Bodenberg, Unity Marketing`s economic forecaster, the reasons for the drop in consumer confidence could include such factors as: the increase in foreclosures, the dip in the value of funds financed by mortgage-based securities, the lag in luxury-home building, skyrocketing oil prices and lack of confidence in the major governmental parties and the executive and legal branches of the government.

"The result is an ennui that hampers the purchase of luxury goods and services–the outlook for the Christmas season is clouded at best," Bodenberg said.