Roy Morgan Research (RMR) has today released its weekly consumer confidence index, which revealed a sharp fall in confidence following the Treasurer Chris Bowen’s announcement of a material deterioration in Federal Budget finances from a projected $18 billion deficit to over $30 billion.
Over the week ended 3-4 August, the RMR index fell by 5.6 points to 112.5, which was the lowest reading in nearly a year (see next chart).
According to RMR:
Fewer Australians (51%, down 5%) say now is a ‘good time to buy’ major household items (the lowest since September 8/9, 2012) compared to 19% (up 4%) that say now is a ‘bad time to buy’.
Now 28% (down 4%) of Australians expect ‘good times’ economically over the next twelve months compared to 32% (up 5%) that expect ‘bad times’ for the Australian economy.
Over the longer term 33% (down 2%) of Australians expect the Australian economy to have ‘good times’ over the next five years compared to 21% (up 3%) of Australians that expect ‘bad times’ for the Australian economy.
Now 39% (down 1%) of Australians expect to be ‘better off’ financially over the next 12 months while 17% (up 4%) expect their family to be ‘worse off’ financially.
However, Australians are now more confident about their personal finances compared to this time last year with 31% (up 2%) saying they are ‘better off’ financially than this time last year and 30% (up 1%) saying they are ‘worse off’ financially.
While the RMR consumer confidence survey is inherently noisy, owing to its weekly frequency, it does tend to track the monthly Westpac-Melbourne Institute consumer sentiment index closely when averaged-out (see next chart).
As such, the latest dive in the RMR index is potentially significant, although it would need to be followed-up with weakness in subsequent weeks’ surveys to elicit concern.
