ANZ-Roy Morgan Consumer Confidence has hit a three-year low this week to 72.7 as Australian consumers react to this month's RBA rate hike.
Consumer confidence is down 3.1 points from last week and has now spent fifteen straight weeks below the mark of 80 - which is the longest stretch since the index began being conducted on a weekly basis in October 2008.
ANZ and Roy Morgan note that the last time consumer confidence spent at least fifteen weeks under 80 was during the 1990-91 recession when the index was conducted on a monthly basis.
Consumer confidence is now 7.7pts below the same week a year ago, June 6-12, 2022 (80.4) and 6.8pts below the 2023 weekly average of 79.5. Around the states, it was up in NSW, but down in Victoria, Queensland, Western Australia and South Australia.
According to ANZ and Roy Morgan, the largest contributor to the fall was a sharp rise in Australians saying now is a ‘bad time to buy’ major household items after the RBA raised interest rates for the 12th time in just over a year.
Now 17% of Australians (unchanged) say their families are ‘better off’ financially than this time last year compared to 56% (up 2ppts) that say their families are ‘worse off’ financially. This is a new record high for this indicator.
Looking forward, just over a quarter of Australians (28% - unchanged) expect their family to be ‘better off’ financially this time next year while 40% (up 1ppt) expect to be ‘worse off’ - the highest figure for this indicator since August 1989.
Only 6% (up 1 ppt) of Australians expect ‘good times’ for the Australian economy over the next twelve months compared 43% (up 4ppts) that expect ‘bad times’.
Sentiment regarding the Australian economy in the longer term remains very weak, ANZ and Roy Morgan state, with only 11% (down 2ppts) of Australians expecting ‘good times’ for the economy over the next five years compared to 22% (up 1ppt) expecting ‘bad times’.
When it comes to buying intentions, 19% (down 2ppts) of Australians now say it is a ‘good time to buy’ major household items while 57% (up 5ppts) say now is a ‘bad time to buy’. This is the highest figure for this indicator since March 2020.
"Consumer confidence fell to its lowest since April 2020 and was among the four weakest results since the pandemic," ANZ senior economist Adelaide Timbrell said.
"Confidence has been at extremely weak levels for around 15 weeks but has fallen 7.2pts further in the last six weeks.
"Confidence about economic conditions, both current and future, fell most sharply last week following the latest RBA cash rate increase to 4.1%."
Timbrell added that confidence about current and future financial conditions, alongside buying major household items, are all within 0.1ppt of their lowest sin e March 2020.
"Confidence fell among renters, outright owners and those paying off their homes, though those paying off their homes fell to a record low."