Consumer confidence hits lowest point for 2023

ANZ-Roy Morgan Consumer Confidence has dipped by 3.2pts to 83.6 this week. It is both the largest weekly drop for six months since early August 2022 and the lowest point so far for the measurement in 2023.

Consumer confidence is now a large 16.3pts below the same week a year ago, January 31 – February 6, 2022 (99.9) and is 2.7pts below the 2023 weekly average of 86.3.

ANZ and Roy Morgan said increasing concern about personal finances and whether now is a ‘good/bad time to buy major household items is driving the current drop. Consumer confidence around Australia was also down in all five mainland states.

More Australians (47% - up 3ppts) say their families are ‘worse off’ financially than this time last year, while only 22% (unchanged say they are ‘better off’.

Looking forward, a third of Australians (33% - down 1ppt) expect their family to be ‘better off’ financially next year, while 34% (up 4ppts) expect to be ‘worse off’. Moreover, only 9% (up 2ppts) of Australians expect ‘good times’ for the Australian economy over the next 12 months, compared to a third (33% - up 3ppts) who expect ‘bad times’.

Sentiment regarding the Australian economy in the longer term is still very weak, according to ANZ and Roy Morgan, with only 12% (down 2ppts) of Australians expecting ‘good times’ for the economy over the next five years compared to 18% (up 1ppt) expecting ‘bad times’.

When it comes to buying intentions, 23% (down 1ppt) of Australians say now is a ‘good time to buy’ major household items while 49% (up 3ppts), say now is a ‘bad time to buy’.

ANZ senior economist Adelaide Timbrell said confidence around current and future finances fell sharply, citing it was perhaps sparked by concerns about the extent of cash rate rises after the Q4 inflation print.

“Household inflation expectations drifted up but are still lower than expectations during the final three months of 2022,” Timbrell said.

“Average confidence among homeowners paying off their mortgages fell less than other housing status cohorts, though still ended the week with lower confidence than renters and outright homeowners.”