ANZ-Roy Morgan Consumer Confidence has dropped a further 3.6 points in the last week to its lowest point in just over two years since December 2023.
The drop came as the Reserve Bank of Australia bumped up interest rates by 25 basis points to 3.85 per cent – the first cash rate lift since November 2023.
Consumer confidence is now a large 9.8 points lower than a year ago, and 4.1 points below the 2026 weekly average of 81.0.
ANZ economist Sophia Angala said that participants were interviewed during the week to Sunday, February 8, so not all of them responded after the RBA’s decision.
“Confidence hit its lowest level since December 2023, after the RBA increased the cash rate to 4.35 per cent in the prior month,” Angala said. “The sharpest falls in the week occurred for household confidence in economic conditions, as five-year economic confidence plunged to its lowest level in 25 years of data history.
“Confidence slipped across all housing cohorts, led by a sharp 5.0pt drop in confidence among outright homeowners. Those paying off their homes are now the least confident cohort.”
An analysis by state shows the Reserve Bank’s decision to raise interest rates hit confidence everywhere, with a uniform fall in confidence across the country this week.
Driving the weekly increase was a rising proportion of Australians expecting ‘bad times’ for the economy over both the next year, and the next five years.
Now, 16 per cent of Australians (down 2ppts) say their families are ‘better off’ financially than this time last year compared to 47 per cent (up 2ppts) that say their families are ‘worse off’.
Views on personal finances over the next year dipped for a second straight week with only 22 per cent (down 2ppts) of respondents expecting their family will be ‘better off’ financially this time next year. This is the lowest figure for this indicator for over 36 years since July 1989.
Meanwhile, 35 per cent (down 1ppt) of Australians expect to be ‘worse off’, which is the lowest net rating for this indicator since November 2023.
Under one-in-ten Australians (8 per cent – unchanged) now expect ‘good times’ for the Australian economy over the next twelve months compared to 38 per cent (up 5ppts) that expect ‘bad times’.
Looking further ahead, there was a 2 percentage point fall in the proportion of Australians expecting ‘good times’ for the economy over the next five years, hitting just 8 per cent, while just three-in-ten Australians (30 per cent – up 4ppts) expect ‘bad times’. The latter is the highest figure for this indicator since February 2020, with overall net rating of negative 22 per cent being the lowest for over 35 years since January 1991.
Net buying intentions were virtually unchanged this week with 20 per cent (down 1ppt) of respondents saying now is a ‘good time to buy’ major household items compared to 39 per cent (unchanged) that say now is a ‘bad time to buy major household items’.