ANZ-Roy Morgan Consumer Confidence dropped by 5.2 points to 79.3 in the second full week of 2026, joining a recent plummet in business confidence among retail businesses.
Consumer confidence is now 6.5 points lower than the same week a year ago, and 7 points below the weekly 2025 weekly average of 86.3.
The index has now hit its lowest level for 18 months since July 8-14, 2024, when it was 78.5.
ANZ economist Sophia Angala said it was the sharpest weekly drop in confidence since February 2023, when the Reserve Bank of Australia lifted in the cash rate to 3.35 per cent.
“Consumer confidence, which saw some improvement following Stage 3 tax cuts introduced in July 2024, has now plummeted to its lowest level since the tax cuts,” Angala said.
Driving the weekly decrease was a plunge in ‘buying sentiment’ and a significant drop in confidence about the next year. Overall, all indicators moved in a negative direction.
Angala said the ‘time to buy a major household item’ subindex eased to its lowest level since late April 2025. One in five Australians (20 per cent – down 6ppts) say now is a ‘good time to buy’ major household items compared to 38 per cent (up 6ppts) that say now is a ‘bad time to buy major household items’.
“This pullback follows an upward trend over the second half of 2025, supported by sales events and moderating inflation,” Angala said. “Household confidence in the five-year economic outlook dropped to its weakest level in over two decades, perhaps impacted by the possibility of rate hikes in 2026.
“While we expect the RBA to be on an extended hold in 2026, we consider the risks of a rate hike in the first half of this year have risen.”
Across the other indices, 17 per cent of Australians (down 2ppts) say their families are ‘better off’ financially than this time last year, which is the lowest figure for this indicator for over two-and-a-half years since June 2023. That is compared to a plurality of 45 per cent (unchanged) that say their families are ‘worse off’.
A quarter of Australians (25 per cent – down 1ppt) expect their family will be ‘better off’ financially this time next year, while 34 per cent (up 1ppt) expect to be ‘worse off’.
Net sentiment regarding the economy over the next year dropped significantly this week with just 6 per cent (down 4ppts) of Australians expecting ‘good times’ for the Australian economy over the next twelve months, which is the lowest figure for this indicator for over two years since November 2023. That is compared to just over a third (34 per cent – up 2ppts) that expect ‘bad times’.
In the longer-term, confidence declined starkly, with just 8 per cent (down 3ppts) of Australians expecting ‘good times’ for the economy over the next five years – the lowest figure for this indicator for over 35 years since June 1990 – compared to 28 per cent (unchanged) expecting ‘bad times’.
Across the states, there were large falls in confidence in New South Wales and Queensland, with small falls in Victoria and South Australia, and virtually unchanged in Western Australia.