ANZ-Roy Morgan Consumer Confidence has dropped 2.1pts to 77.7 this week as the Federal Government released its Budget 2023-24.
Consumer confidence has now spent ten straight weeks below the mark of 80 – the longest stretch below 80 since the index began being conducted on a weekly basis in October 2008.
Consumer confidence is now 12.8pts below the same week a year ago, May 2-8, 2022 (90.5) and 2.9pts below the 2023 weekly average of 80.6.
It was mixed around the states, with decreases in Victoria, WA and SA, and increases in NSW and Queensland.
The driver of this week’s decrease, according to ANZ and Roy Morgan, was growing concerns about the Australian economy’s performance going forward as well as less confidence that now is a ‘good time to buy’ major household items following the RBA’s latest interest rate increase, up 0.25% to 3.85%.
Now 19% of Australians (down 1ppt) say their families are ‘better off’ financially than this time last year compared to 53% (up 3ppts) that say their families are ‘worse off’ financially - the lowest figure for this indicator for over three decades since March 1991.
Looking forward, 32% (up 1ppt) expect their family to be ‘better off’ financially this time next year while 34% (unchanged) expect to be ‘worse off’.
Only 6% (unchanged) of Australians expect ‘good times’ for the Australian economy over the next twelve months compared to 38% (up 3ppts) that expect ‘bad times’.
Meanwhile, 11% (unchanged) of Australians are expecting ‘good times’ for the economy over the next five years compared to 20% (up 1ppt) expecting ‘bad times’.
Regarding buying intentions, now 18% (down 2ppts) of Australians say now is a ‘good time to buy’ major household items while 53% (up 1ppt) say now is a ‘bad time to buy’.
ANZ senior economist Adelaide Timbrell said RBA’s interest rate increase likely pushed consumer confidence lower.
“Confidence remained below 80 for a tenth straight week, the longest stretch below 80 since the 1990-91 recession when the survey was conducted monthly, and it was below 80 for five consecutive months,” Timbrell said. “Confidence declined among all housing cohorts and fell the most for those paying off their homes (-3.2pts).
“Current economic and financial conditions were most affected, with both indices falling below 70.”