ANZ-Roy Morgan Consumer Confidence was virtually unchanged at 82.5 this week, down 0.4pts, as Australia charges into Christmas.
Consumer confidence has now spent the last four weeks before Christmas in a tight band between 82.5 to 83.1. It is also 25.9pts below the same week a year ago, December 18/19, 2021 (108.4), and is now 6.2pts below the 2022 weekly average of 88.7.
Although Consumer Confidence was virtually unchanged this week, the measure was up slightly in New South Wales and Victoria but down in Queensland, Western Australia and South Australia.
Roy Morgan said there was very little movement across the index this week. There was a slight improvement in sentiment regarding the Australian economy over the five years, offset by growing worries about the performance of the economy over the short-term of the next year.
Now 23% of Australians (up 2ppts) say their families are ‘better off’ financially than this time last year compared to 46% (up 1ppt) that say their families are ‘worse off’ financially.
Looking forward, 30% (unchanged) expect their family to be ‘better off’ financially this time next year while 33% (unchanged) expect to be ‘worse off’.
Only 6% (down 2ppts) of Australians expect ‘good times’ for the Australian economy over the next twelve months, while 35% (up 2ppts) expect ‘bad times.’
Sentiment regarding the Australian economy in the longer term is still very weak, according to Roy Morgan, with only 12% (up 1ppt) of Australians expecting ‘good times’ for the economy over the next five years compared to 18% (down 1ppt) expecting ‘bad times’.
When it comes to buying intentions, 22% (down 1ppt) of Australians say now is a ‘good time to buy’ major household items, while nearly half of Australians (48% - down 1ppt) say now is a ‘bad time to buy’.
ANZ senior economist Catherine Birch said the consumer confidence is almost 30pts below the long-term average as 2022 ends.
“Over the past four weeks, confidence has steadied within a narrow range in the low-80s,” Birch said. “Last week’s decline was largely driven by a 3.5pt drop in the ‘economic conditions next year’ subindex.
“The persistent weakness in sentiment now appears to be weighing on household spending. ANZ-observed data suggest spending lost momentum early in the holiday season, which could signal the beginning of a cyclical slowdown.
“In 2023, we’ll be watching how confidence responds to the combination of falling inflation and rising nominal wage growth. It’s possible we’ll see a sustained improvement, even under the burden of higher rates.”