Key takeaways
Consumer confidence fell in most States this week, down in NSW, Victoria, Queensland and South Australia, but there was an improvement in Western Australia. The personal financial indicators and the good/bad time to buy indicators drove the fall in the index.
Very weak consumer confidence has not, so far, translated into lower household spending. However, the longer confidence remains so low, the greater the prospect that consumers become more cautious.
Australians expect the economy to have bad times over the next twelve months, and more than a third expect bad times over the next five years.
I always keep careful track of consumer confidence because it's a good indicator of what's ahead for our economy and property markets.
And recently consumer confidence fell 2.4pts to 82.2 and is now a large 24.8pts below the same week a year ago.
In addition, consumer confidence is now 8.1pts below the 2022 weekly average of 90.3.
Consumer confidence fell in most States this week
As measured by ANZ-Roy Morgan, Consumer Confidence fell in most States this week, down in NSW, Victoria, Queensland and South Australia, but there was an improvement in Western Australia.
Across the index, the personal financial indicators and the good/bad time to buy indicators drove the fall in the index.
Mr David Plank, ANZ Head of Australian Economics commented:
"Consumer confidence plunged 2.8% as inflation expectations jumped to its highest since late July when petrol prices last peaked.
The weaker AUD along with an uptick in petrol prices over the past couple of weeks likely led to the surge in household inflation expectations to 6%.
This weighed heavily on consumer sentiment, with the subindex that captures whether ‘it is a good time to buy a major household item’ dropping 6.2%.
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Very weak consumer confidence has not, so far, translated into lower household spending.
But the longer confidence remains so low the greater the prospect that consumers become more cautious, especially with household wealth going backwards due to lower house and equity prices."
Here's what the latest survey of consumer confidence found
Current financial conditions
- Now 22% of Australians (down 1ppt) say their families are ‘better off’ financially than this time last year compared to 45% (up 1ppt) that say their families are ‘worse off’ financially.
Future financial conditions
- Looking forward, now fewer than a third of Australians, 32% (unchanged), expect their family to be ‘better off’ financially this time next year while 34% (up 4ppts), expect to be ‘worse off’.
Current economic conditions
- Only 7% (up 1ppt) of Australians expect ‘good times’ for the Australian economy over the next twelve months compared to more than a third, 38% (unchanged), that expect ‘bad times.’
Future economic conditions
- Sentiment regarding the Australian economy in the longer term is down this week with only 11% (down 2ppts) of Australians expecting ‘good times’ for the economy over the next five years compared to 18% (unchanged) expecting ‘bad times’.
Time to buy a major household item
- When it comes to buying intentions now 22% (down 2ppts) of Australians, say now is a ‘good time to buy’ major household items while more than twice as many, 48% (up 3ppts), say now is a ‘bad time to buy’.
