ANZ-Roy Morgan Consumer Confidence has dropped 1.8pts to 85.9 this week, the first fall in the index for 2023. Consumer Confidence is now 14.2pts below the same week a year ago, January 17-23, 2022 (100.1), and is 2.8pts below the 2022 weekly average of 88.7.
ANZ and Roy Morgan cite a softening in sentiment related to personal financial situations for the fall, with more Australians expecting to be ‘worse off’ financially this time next year and more Australians saying they are now ‘worse off’ financially than this time a year ago.
Consumer Confidence was down slightly in most parts of Australia including New South Wales, Victoria, Western Australia and Queensland, but was up in South Australia.
A fifth of Australians (22%) say their families are ‘better off’ financially than this time last year, compared to 45% (up 2ppts) that say their families are ‘worse off’ financially.
Looking forward, over a third of Australians (34%) expect their family to be ‘better off’ financially this time next year, while 31% (up 2ppts) expect to be ‘worse off’.
Only 9% (up 1ppt) of Australians expect ‘good times’ for the Australian economy over the next twelve months, compared to 30% (down 1ppt) that expect ‘bad times’. This is the lowest figure for this indicator since late May 2022 – the week after the election of the Albanese Government.
Sentiment regarding the Australian economy in the longer term is still very weak, with only 14% of Australians expecting ‘good times’ for the economy over the next five years, compared to 19% (up 2ppts) expecting ‘bad times’.
When it comes to buying intentions, 23% (down 3ppts) of Australians say now is a ‘good time to buy’ major household items while 47% (up 1ppt) say now is a ‘bad time to buy’.
ANZ senior economist Adelaide Timbrell said while current and future finances fell a little, future financial conditions are still in positive territory.
“Sentiment about current economic conditions improved, but consumers’ five-year view outlook on the economy softened,” Timbrell said. “Household inflation expectations rose 0.3ppt to 5.7% but remained below the inflation expectations of late 2022.
“Media coverage of the inflation data and the first RBA meeting of 2023, which we expect to result in a cash rate hike, could both be headwinds for confidence in coming weeks.”