1. ANZ-Roy Morgan Consumer Confidence increased slightly to 78.7 this week, breaking a trend of the past month. However, the index has remained below 80 for a record 27 straight weeks.
2. Consumer Confidence is now 7.4 points lower than the same week last year and just above the 2023 weekly average of 78.1.
3. Consumer Confidence varied across states, with increases in Victoria and South Australia, but slight decreases in New South Wales, Queensland, and Western Australia.
4. The small increase in the index was driven by improved sentiment regarding the long-term economy and buying major household items.
5. While some Australians feel better off financially compared to last year, a majority still believe their families are worse off. Expectations for future financial and economic conditions are mixed, with a slight improvement in sentiment for the longer term.
The ANZ-Roy Morgan Consumer Confidence Index has seen a slight uptick, registering at 78.7, a 0.6 point increase compared to the previous week. This marks the highest level recorded in the past four months. However, it is important to note that the index has remained below the 80-point threshold for a record 27 consecutive weeks, which is over six months.
Despite the modest increase, the consumer confidence is still 7.4 points lower compared to the same period last year, which recorded a score of 86.1. The current score is slightly above the 2023 weekly average of 78.1.
A state-wise analysis presents a mixed picture. Victoria and South Australia experienced a rise in consumer confidence, whereas it dipped slightly in New South Wales, Queensland, and Western Australia.
The economic sentiment regarding the long-term prospects has shown improvement. The positive shift is driven by a more optimistic outlook on the economic conditions over the next five years, with 12% anticipating ‘good times’, a 1-point increase from the previous week. Moreover, the number of people expecting ‘bad times’ decreased by 3 points to 19%.
The buying sentiment has also seen a marginal improvement, with 21% believing it is a ‘good time to buy’ major household items, maintaining the same percentage as the previous week. However, a significant 52% still consider it a ‘bad time to buy’, albeit this is a 3-point decrease from the last week.
ANZ Senior Economist, Adelaide Timbrell, highlighted that the encouraging July CPI indicator, which demonstrated a decline in annual inflation, likely supported the boost in confidence. Government rebates that reduced the net price increase of electricity from 19.2% month-on-month to 6% month-on-month have potentially aided household financial confidence. Furthermore, the RBA’s anticipated extended pause might be contributing to the current trend. It was noted that outright owners are experiencing a steady rise in confidence levels, whereas those with mortgages are witnessing stagnant confidence, which is lower compared to renters and outright owners.
While the ANZ-Roy Morgan Consumer Confidence Index has witnessed a slight increase, reaching its highest point since April 2023, it remains below the desired 80-point mark, maintaining this stance for over six months. The mixed regional responses and cautious economic and buying sentiments indicate a complex landscape for consumer confidence in Australia.