Roy Morgan research revealed that retailer confidence has slipped further in September, matched with a recent four-week low in ANZ Roy Morgan consumer confidence.
Retailer confidence in September 2025 was at 88.2 points, down from 95.6 points in August and a recent high of 108.5 in July – above the neutral level of 100.
The recent month-on-month slip in retail trade confidence comes despite a 3 percentage point lift in overall business confidence to 101.6, following a Reserve Bank cut to interest rates in mid-August by 0.25 per cent to 3.6 per cent.
Mining, accommodation and food services, administration and support services, and financial and insurance services are the four most confident industries during August and September 2025. In September, mining led the way, with a score of 129.8. Financial and insurance services were at 109.5.
Roy Morgan CEO Michele Levine said total business confidence lifted as businesses grew more confident that the next year is a ‘good time to invest’ in growing the business, and more businesses say they are ‘better off’ financially than this time a year ago. And on top of the cash rate cut in August, the ASX200 stock index closed above 9,000 for the first time in late August by closing at an all-time high of 9,019.
“However, since the interest rate cut in mid-August, hopes for additional cuts have been tempered by a re-acceleration in official inflation,” Levine said. “The ABS monthly CPI estimates for July showed inflation at 2.8 per cent, and this increased to 3 per cent for August – the highest figure for over a year since July 2024.
“Driving the rise in confidence was an increase in businesses saying that the next 12 months is a ‘good time to invest’ in growing the business – 39.3 per cent (up 1.3ppts) and a fall in businesses saying it’s a ‘bad time to invest’, down 9.2 percentage points to 29.5 per cent – a net improvement of 10.5ppts.
“In addition, an increasing proportion of businesses now say they are ‘better off’ financially than a year ago – now 33.4 per cent (up 4.9ppts) – and the highest figure for this indicator so far this year.”
Retail’s low confidence puts it in the bottom five least confident industries, just ahead of manufacturing (83.9), public administration and safety (82.7), agriculture, forestry and fishing (76.8) and wholesaling (74.0).
The recent slumps in retail confidence matched recent subdued sentiment in consumer confidence. ANZ-Roy Morgan Consumer Confidence dropped 1.2 points in early October to 85.1 after the Reserve Bank left interest rates unchanged at 3.6 per cent last week.
Consumer confidence is now 1.6 points above the same week a year ago and 1.7 points below the 2025 weekly average of 86.8.
This confidence is down from a recent peak of 89.3, recorded in early September.
ANZ economist Sophia Angala said the RBA board’s post-meeting commentary was also a little hawkish than expected, which was likely a factor in this week’s confidence drop among consumers.
“On a four-week moving average basis, weekly inflation expectations are at their highest level since late January,” Angala said. This may have been influenced by the RBA’s post-meeting statement noting that Q3 inflation may come in higher than RBA expectations.”
Angala said she and her team now expect a 0.9 per cent quarter-on-quarter increase in trimmed mean (underlying) inflation in the third quarter, which suggests the RBA will hold the cash rate for the remainder of the year.
“We now expect the RBA to cut the cash rate by 25 basis points in February 2026, and for the cash rate to then stay at 3.35 per cent for an extended period. The absence of a widely anticipated rate cut later this year could see a slowing of the consumer recovery.”
Roy Morgan and ANZ data showed there were small declines across all five components of the consumer confidence indices.
Just a fifth of Australians (20 per cent – down 2ppts) say their families are ‘better off’ financially than this time last year, compared to 41 per cent (down 1ppt) that say their families are ‘worse off’.
Slightly over a quarter (26 per cent – down 3ppts) of respondents expect their family will be ‘better off’ financially this time next year, while 31 per cent (down 2ppts) expect to be ‘worse off’.
Net sentiment regarding the economy over the next year deteriorated slightly this week, with just 9 per cent (down 1ppt) of Australians expecting ‘good times’ for the Australian economy over the next twelve months, compared to 30 per cent (up 1ppt) that expect ‘bad times’.
Views regarding the Australian economy in the longer-term were virtually unchanged this week, with 12 per cent (up 2ppts) of Australians expecting ‘good times’ for the economy over the next five years compared to 27 per cent (up 2ppts) expecting ‘bad times’.
As for buying intentions, they were slightly down this week with 22 per cent (down 1ppt) of respondents saying now is a ‘good time to buy’ major household items, compared to 34 per cent (up 1ppt) that say now is a ‘bad time to buy major household items’.
An analysis by state shows mixed results in consumer confidence, with declines in Victoria, Queensland and Western Australia being only partially offset by small increases in New South Wales and South Australia.