ANZ-Roy Morgan Consumer Confidence rose to 87.8 this week by 1.8pts, still below the neutral level of 100 which Australia had surpassed in 2021.

The announcement comes as a Taking the Pulse of the Nation (TTPN) survey found Australian consumers are using various measures to deal with higher cost of living.

The rise in consumer confidence is now a large 15.9pts below the same week a year ago (September 25/26, 2021). In addition, consumer confidence is now 3pts below the 2022 weekly average of 90.8.

ANZ senior economist Catherine Birch commented on the rise, saying that while it was still below neutral level, “at least two of the five confidence subindices exceeded 100 for the first time since early March.

“The increase in headline confidence was mainly driven by improved sentiment around Australia’s economic conditions,” Birch said. “Continued strength despite 225bp of rate hikes over the past five months may be quelling fears of a sharp downturn.

“ANZ-observed spending data show household spending was solid in the first half of September, including on discretionary goods and services.

“The sharp drop in inflation expectations to a seven-month low of 5.0%, despite higher petrol prices, also likely supported confidence.”

According to Roy Morgan, there was no clear trend on a state-by-state basis with NSW, Queensland and WA up for a second straight week, with Victoria down for a second straight week.

The market research company also said that 24% of Australians (up 1ppt) say their families are now ‘better off’ financially than this time last year, compared to an unchanged 42% that say their families are ‘worse off’ financially.

Looking forward, now fewer than a third of Australians (32% - down 2ppts), expect their family to be ‘better off’ financially this time next year while 31% (up 2ppts) expect to be ‘worse off’.

An increasing 9% (up 2ppts) of Australians expect ‘good times’ for the Australian economy over the next twelve months compared to a third (33% - down 2ppts) that expect ‘bad times.’

Over one-in-six (17% - up 5ppts) of Australians are expecting ‘good times’ for the economy over the next five years. This is the highest figure for this indicator for over five months since mid-April.

That figure is compared to 16% (down 1ppt) expecting ‘bad times’, which is the lowest for this indicator for over seven months since mid-February.

When it comes to buying intentions in the current market, 24% (up 1ppt) of Australians say now is a ‘good time to buy’ major household items while almost twice as many, 45% (down 1ppt), say now is a ‘bad time to buy’.

How consumers are battling the higher cost of living

Australians have experienced substantial increases in their cost of living over the past few months, according to Roy Morgan and Melbourne Institute: Applied Economic & Social Research.

Given relatively low growth of incomes and wages, they said, making ends meet for most people can require changes to spending behaviour, while finding ways to mitigate the impact of higher prices on their personal finances.

Melbourne Institute’s TTPN survey recently asked Australians to indicate which strategies or steps they have taken to deal with the rising cost of living.

About 56% of Australians say they bought cheaper food options, and just over half are dining out less. Almost 38% of respondents are dipping into savings, and 37% are cutting back on home energy use.

Less than 10% have borrowed money, either from friends, relatives or financial institutions.

Single-parent households with children are struggling more so than partnered households. Almost 15% have pawned or sold possessions, 24% have cancelled or deferred medical appointments, 34% deferred bills or negotiated payment plans and a quarter have borrowed from friends or relatives.

Roughly 64% of people in ‘financial stress’ are using their savings, compared to 30% of those not in financial stress.

Other measures most common among those in financial stress include pawning items (21%), borrowing from friends or relatives (23%), deferring bills or negotiating payment plans (32%), cancelling or deferring medical appointments (33%), cutting back on home energy use (53%) and on recreation (60%), reducing dining out (74%) and buying cheaper food options (78%).

In many cases, these proportions are more than triple for those in financial stress compared to those not in financial stress.

Since 2020, the TTPN survey has collected compelling information on the changing behaviours and attitudes of Australians.

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