ANZ-Roy Morgan Consumer Confidence has dropped below its lowest point in 2023 by another 5.5pts to 78.1 this week after the RBA increased official interest rates to the highest rate since October 2012 (up +0.25% to 3.35%). It has now hit its lowest point since April 2020.
This was the largest weekly drop in Consumer Confidence following an RBA meeting since a drop of 6.6pts after the RBA increased interest rates by +0.5% in early June 2022.
Consumer confidence is now a large 25.1pts below the same week a year ago (February 7-13, 2022, 103.2). It is now also 6.8pts below the 2023 weekly average of 84.9.
Driving this week’s decline in consumer confidence was increasing concern about the performance of the Australian economy over the next year, a comparison of personal finances compared to a year ago, and whether now is a ‘good/bad time to buy’ major household items.
Consumer Confidence was down in all five mainland states this week, and under 80 in all of them except Western Australia.
Now 19% of Australians (down 3ppts) say their families are ‘better off’ financially than this time last year, compared to 49% (up 2ppts) that say their families are ‘worse off’ financially.
Looking forward, under a third of Australians (31% - down 2ppts) expect their family to be ‘better off’ financially this time next year, while just over a third (35% - up 1ppt) expect to be ‘worse off’.
Only 7% (down 2ppts) of Australians expect ‘good times’ for the Australian economy over the next twelve months, compared to 41% (up 8ppts) that expect ‘bad times’.
Regarding the Australian economy, 13% (up 1ppt) of Australians expecting ‘good times’ for the economy over the next five years, compared to 18% (unchanged) expecting ‘bad times’.
When it comes to buying intentions, 17% (down 6ppts) of Australians say now is a ‘good time to buy’ major household items, while over half (54% - up 5ppts) say now is a ‘bad time to buy’.
ANZ senior economist Adelaide Timbrell said the average confidence among people paying off their mortgages fell sharper (10pts) than other housing cohorts last week.
“Confidence among homeowners and renters also fell, by 5.2pts and 2.9pts respectively,” Timbrell said. “The subindex for whether ‘it is a good time’ to buy a major household item dropped to its lowest since April 2020.”
The lowest point in consumer confidence was recorded in March 2020 at 72.2, with ANZ and Roy Morgan calling it a 30-year low.