Consumer confidence has recovered slightly in the last week after falling by 6.8 points over the previous three weeks amid the latest Reserve Bank interest rate hike.
ANZ-Roy Morgan Consumer Confidence increased 0.9 points to 68 in mid-October. Despite the lift, it is now a large 15 points lower than a year ago and 4.1 points below the 2026 weekly average of 72.1.
Consumer confidence was driven slightly higher this week due to small improvements in confidence in relation to personal finances and the performance of the Australian economy.
Now just over one-in-seven (15 per cent – unchanged) of Australians say their families are ‘better off’ financially than this time last year compared to a majority of 55 per cent (down 1ppt) that say their families are ‘worse off’.
Views on personal finances over the next year improved slightly this week with under one-in-five (19 per cent – down 1ppt) of respondents expecting their family will be ‘better off’ financially this time next year, while 42 per cent (down 3ppts) expect to be ‘worse off’.
Only 5 per cent (unchanged) of Australians are now expecting ‘good times’ for the economy over the next year, while 45 per cent (down 1ppt) expect ‘bad times’.
Australians’ views about the economy’s performance over the longer term are virtually unchanged, with 8 per cent (up 1ppt) of Australians expecting ‘good times’ for the economy over the next five years compared to almost a third (32 per cent – unchanged) expecting ‘bad times’.
Meanwhile, net buying intentions were unchanged this week with just 14 per cent (unchanged) of respondents saying now is a ‘good time to buy’ major household items compared to an increasing plurality of 47 per cent (unchanged) that say now is a ‘bad time to buy major household items’.
ANZ economist Sophia Angala said despite the small rise, confidence remains well below its long-run average.
“This suggests higher rates and inflation continue to weigh on households and are likely to slow consumer demand over the near term,” Angala said.
“Weekly inflation expectations remain elevated compared to the beginning of the year.”
Angala added that the recent release of the minutes from the RBA Monetary Policy Board’s September meeting should provide a clearer indication of how the RBA is assessing the balance between slower activity and persistently elevated inflation pressures.
“We continue to think another 25bp increase in the cash rate in November is more likely than not, as we expect Q3 trimmed mean (underlying) inflation to exceed the RBA’s forecasts.”
An analysis by state shows confidence increasing in the two largest states of New South Wales and Victoria, decreasing in Queensland and Western Australia, and virtually unchanged in South Australia.