ANZ-Roy Morgan Consumer Confidence rose 0.4% to 112.9 this week.
Consumer Confidence has recovered from the lows experienced three weeks ago (up 5.5% from the recent low).
However, levels remain subdued and are down compared to a year ago (-1.8%).
While an improvement in consumers’ views about the economic outlook has helped the lift in overall confidence more recently, views towards current financial conditions remain the highlight.
- The latest figures show consumers’ view of their personal finances compared to a year ago reached the highest levels in the history of the weekly confidence survey (the weekly series began October 2008; see Figure 3).
- Households’ view of the economic outlook has shown the most improvement in the past few weeks with their view of ‘economic conditions in the next year’ (+5.7%) and ‘economic conditions in the next five years’ (+1.8%) both rising last week. Despite the lift, however, levels remain below the long run average.
ANZ Chief Economist Warren Hogan commented:
“ANZ-Roy Morgan Consumer Confidence is stable this week but still below the levels seen in early July just prior to the problems in Greece and China’s stock market rout. The recent bounce suggests the loss of confidence in July was attributable to these offshore events, but the fact that it remains below the levels seen for much of the May-June period highlights how vulnerable the Australian consumer is to bad economic news. At this level, consumer confidence is right on the long-term average.
“The underlying drivers of confidence reflect the complexity of forces affecting the Australian economy at present. Three weeks ago consumers’ views on the long-term economic outlook sank to the lowest level since the weekly survey began in 2008, but have recovered somewhat since. This week consumers’ views on their own finances right now have hit a new high point. In essence, Australian consumers are happy with their financial position but are very worried about the outlook. High debt levels across the household sector, the weakest income growth since the 1960s, a flat labour market, and concerns over retirement incomes are all apparently at work here.
“In this environment we expect consumer demand to remain on an even footing but will not grow strongly. Importantly, Australian consumers are vulnerable to bad economic news at present.”