There has been some debate about the influence of external events upon Australian consumer confidence. To my knowledge, nobody as actually tried to measure the effects discretely, but this week’s Roy Morgan Consumer Confidence reading weighs in heavily on the side of deep impact. The number fell 7.5 points to the lows of mid last year:
Consumer Confidence is at 108.2pts (down 7.5pts in a week) according to the Roy Morgan Consumer Confidence Rating conducted last weekend (May 19/20, 2012). Consumer Confidence is now 7.4pts lower than a year ago May 21/22, 2011 (115.6).
The fall in Consumer Confidence has been driven by decreased confidence about all components of the survey, especially confidence about the next year.
Australians have lost confidence over the past week about their personal finances over the next 12 months with 35% (down 3%) saying they expect their family to be ‘better off’ financially while 25% (up 8%) expect to be ‘worse off’ (the highest since July 30/31, 2011.
Australians are also far less confident about Australia’s economy over the next twelve months with 28% (down 5%) of Australians expecting ‘good times’ economically over the next twelve months compared to 36% (up 5%) that expect Australia to have ‘bad times’.
Australians are also less confident about Australia’s economy over the longer term with 32% (down 3%) of Australians expecting Australia to have ‘good times’ economically over the next five years compared to 24% (up 6%) that expect ‘bad times’.
Now 29% (down 1%) of Australians say their family is ‘better off’ financially compared to a year ago while 31% (up 4%) say their family is ‘worse off’ financially.
Now a decreasing majority of Australians 53% (down 2%) say now is a ‘good time to buy’ major household items while 20% of Australians (up 1%) say now is a ‘bad time to buy’ major household items.
The debate around the external effects upon Australians has taken the predictably idiotic course of saying consumers should either not be affected (because we are different) or they are listening too much (because we are different but Anglo-obsessed). To my mind the Roy Morgan figures (as well as other data like the savings rate) show that Australians are listening because they know in their hearts that we are no different at all.
Coming on the back of the terrible April services economy data and the sliding prices in our largest export commodities, this reading tells me we need another rate cut in June. If the data flow continues, it’ll need to be 50bps.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
In my work environs which is incomes of $180k+ the issue is the housing deflation mainly and the ASX a distant 2nd. My spouse’s which is incomes circa $80k its the same. A combo of all the news IMO but the ‘houses always go up’ thingy being a total furphie is f*cking with their heads. Perfect storm?
Janet
As it is here in NZ V. Apart from the PAGU mantra,there’s the constant bleating in the MSM of,” But Europe won’t affect us. Our future lies in Asia”. Tonight on TV we got regaled with an aging property ‘guru’ gloating about the absurdity of those who over the last 4 years even had the cheek to ‘frighten people, and suggest that property prices might fall: followed by our Treasurer ( Budget Day tomorrow) re-assuring the populace that ‘property investment is not a bad thing’. What hope is there for an alternative view from the wider public, when they only get one side of the argument!
innocent bystander
its just the denial stage
GB
agreed, very little to do with EU or ASX. everyone is geared to the eyeballs in property and it is falling, thats why they are sad. they probably also feel abit cheated and ripped off when they look back on the reason they got in so deep in the first place…property only ever goes up, safe as houses, housing shortage. people are feeling like real idiots having bought into this stuff hook line and sinker. thats what kills confidence, realising you have been played for a fool
Makes me wonder why so many are on anti-depressants. The ones that aren’t, look like they either have ants in their pants or flies on their faces.
Where did they conduct this survey? Sydney’s Mosman retirement village for the Gentry and Dames?
myne
I’m actually impressed with mainstream Australia.
Given the events of 2008 only happened once in living memory, I think it’s fantastic that the shock realisation of global interdependence has solidified in the minds of the consumer.
We got out lucky last time. Everyone knows it. Bravo Australia. Once bitten, twice shy indeed.
In my work environs which is incomes of $180k+ the issue is the housing deflation mainly and the ASX a distant 2nd. My spouse’s which is incomes circa $80k its the same. A combo of all the news IMO but the ‘houses always go up’ thingy being a total furphie is f*cking with their heads. Perfect storm?
As it is here in NZ V. Apart from the PAGU mantra,there’s the constant bleating in the MSM of,” But Europe won’t affect us. Our future lies in Asia”. Tonight on TV we got regaled with an aging property ‘guru’ gloating about the absurdity of those who over the last 4 years even had the cheek to ‘frighten people, and suggest that property prices might fall: followed by our Treasurer ( Budget Day tomorrow) re-assuring the populace that ‘property investment is not a bad thing’. What hope is there for an alternative view from the wider public, when they only get one side of the argument!
its just the denial stage
agreed, very little to do with EU or ASX. everyone is geared to the eyeballs in property and it is falling, thats why they are sad. they probably also feel abit cheated and ripped off when they look back on the reason they got in so deep in the first place…property only ever goes up, safe as houses, housing shortage. people are feeling like real idiots having bought into this stuff hook line and sinker. thats what kills confidence, realising you have been played for a fool
Australia – happiest nation in the OECD!!
http://www.theaustralian.com.au/business/wall-street-journal/australia-happiest-nation-in-oecd/story-fnay3ubk-1226363717594
Forget the gloom, we’ve got it good – let’s party. 🙂
we just did.
Makes me wonder why so many are on anti-depressants. The ones that aren’t, look like they either have ants in their pants or flies on their faces.
Where did they conduct this survey? Sydney’s Mosman retirement village for the Gentry and Dames?
I’m actually impressed with mainstream Australia.
Given the events of 2008 only happened once in living memory, I think it’s fantastic that the shock realisation of global interdependence has solidified in the minds of the consumer.
We got out lucky last time. Everyone knows it. Bravo Australia. Once bitten, twice shy indeed.