Well, there go the 2013 gains for Roy Morgan consumer confidence. RM puts it down to:
The weekly Roy Morgan Consumer Confidence Rating shows Consumer Confidence plunging to 113.6 (down 5.3pts since April 27/28, 2013). Consumer Confidence is now 3.3pts higher than at the same time a year ago when it was 110.3 (May 5/6, 2012). This week’s fall in Consumer Confidence has been driven by decreasing confidence across all components of the survey.
Fewer Australians 26% (down 7%) expect ‘good times’ over the next twelve months for the Australian economy (the lowest since September 8/9, 2012) compared to 30% (up 3%) that expect ‘bad times’ economically (the highest since December 15/16, 2012).
Over the longer-term now 30% (down 4%) of Australians expect ‘good times’ for the Australian economy over the next five years (the lowest since June 11/12, 2011) compared to 20% (up 1%) that expect Australia to have ‘bad times’ (the highest since December 8/9, 2012).
Also less Australians 36% (down 6%) expect to be ‘better off’ financially over the next 12 months (the lowest since August 11/12, 2012) while 13% (down 1%) expect their family to be ‘worse off’ financially.
Australians are also more worried about their personal finances compared to this time last year with 29% (down 1%) of Australians saying they are ‘better off’ financially than this time last year compared to 29% (up 3%) that say they are ‘worse off’ financially.
Now 56% (down 1%) of Australians say now is a ‘good time to buy’ major household items compared to 17% (up 2%) that say now is a ‘bad time to buy’.
Gary Morgan says:
“Roy Morgan Consumer Confidence has fallen 5.3pts to 113.6, the lowest since mid-November 2012, and the second consecutive weekly fall after Prime Minister Julia Gillard announced a larger than expected Federal Budget Deficit of $12 billion, and also flagged an increase to the annual Medicare levy to help fund the National Disability Insurance Scheme (NDIS).
OK, so we could read this a number of ways. It could be a loss of confidence in Gillard. It could be a confirmation that Ricardian equivalence has some power after all, that government saving does stimulate private confidence and vice versa.
My guess is that this is something more specific. Growing fiscal instability resonates with consumers because it confirms the disquieting feeling that is driving them to save has a cause. It’s some form of cycle shock, an adjustment to a new normal, that the public cannot shake: part GFC anxiety, part post-mining boom worry and part political economy despair.
It’s the mirror image of the cycle that preceded it, when consumers bounced back from every shock via cheaper debt and higher borrowing and faith in policy makers was absolute. Now every shock reminds us of the truth we seek to forget.
Confidence is capped, not underpinned.
