️ Highlights:
1. ANZ-Roy Morgan Consumer Confidence has dropped to its lowest level since mid-July 2023 after the RBA raised interest rates to the highest level in 12 years.
2. Consumer Confidence has spent a record 41 straight weeks below the mark of 85 and is now 6.5 points lower than the same week a year ago.
3. Consumer Confidence was down in NSW, Victoria, Queensland, and South Australia, but slightly up in Western Australia, reversing the previous week’s trend.
4. The decrease in Consumer Confidence is driven by a deterioration in people’s buying intentions after the interest rate rise and growing concerns about the long-term health of the Australian economy.
5. Only 7% of Australians expect “good times” for the Australian economy over the next twelve months, while 40% expect “bad times.” Net sentiment for the long-term economic outlook is at its lowest level since April 2020.
A Deep Dive into the Latest Consumer Confidence Trends in Australia
The latest ANZ-Roy Morgan Consumer Confidence report presents a concerning picture of Australian consumer sentiment. The index plunged by 3.5 points to 74.3, marking its lowest level since mid-July 2023. This decline follows the Reserve Bank of Australia’s (RBA) decision to raise interest rates to a 12-year high of 4.35%, significantly impacting consumer outlook and spending intentions.
Key Findings from the Report
- Historical Low in Consumer Confidence: The current consumer confidence level is now at its lowest since mid-July 2023 and has remained below the 85-point benchmark for a record 41 consecutive weeks. This represents a significant 6.5-point drop from the same week a year ago.
- State-by-State Analysis: The decline in consumer confidence was observed across New South Wales, Victoria, Queensland, and South Australia. Interestingly, Western Australia showed a slight increase, going against the overall national trend.
- Financial and Economic Outlook: The report highlights a deterioration in people’s buying intentions following the interest rate rise. Concerns about the long-term health of the Australian economy have grown, with only 7% of Australians expecting good times for the economy over the next twelve months. This sentiment is even more pronounced for the five-year outlook, with only 10% expecting positive economic conditions.
- Impact on Household Finances: About 20% of Australians report that their families are better off financially than last year, while a majority of 54% feel worse off. Looking ahead, under a third expect their family to be better off financially next year, while 38% expect to be worse off.
- Buying Intentions and Retail Outlook: The report indicates a decline in buying intentions, particularly for major household items. Only 18% of Australians believe it is a good time to buy major household items, a concerning trend as the Christmas retailing period approaches.
Implications for the Australian Economy
The findings of the ANZ-Roy Morgan Consumer Confidence report are a clear indicator of the challenges facing the Australian economy. The combination of high interest rates, inflationary pressures, and a cautious outlook on the economy is dampening consumer sentiment. This trend could have significant implications for retail spending, housing market activity, and overall economic growth.
Conclusion: Navigating Economic Uncertainty
As Australia grapples with these economic challenges, understanding consumer sentiment is crucial for businesses, policymakers, and investors. The ANZ-Roy Morgan Consumer Confidence report provides valuable insights into the mood of Australian consumers, offering a gauge of the nation’s economic health and future prospects.
For a more detailed analysis and comprehensive understanding of these trends, the full ANZ-Roy Morgan Consumer Confidence report is available for further exploration.