Roy Morgan Research (RMR) last night released its weekly consumer confidence index, which retraced for the second straight week after recently hitting two-and-a-half year highs.
Over the week ended 26-27 of October, the RMR index fell by 1.9 points to 120.9, driven by a decrease in confidence about the economy and lower expectations around family finances (see next chart).
The index is now down 3.3 points (-2.7%) from the high reached in the weekend of 12-13 October, although it remains elevated relative to recent experience.
According to Gary Morgan:
“Consumer Confidence has fallen for the second consecutive week to 120.9 (down 1.9pts). The fall in Consumer Confidence was driven by decreasing confidence about the next 12 months with 35% (down 2%) expecting ‘good times’ for the Australian economy and 43% (down 2%) expecting to be ‘better off’ financially this time next year.
“The fall in Consumer Confidence comes despite some clear positives last week. The All Ordinaries Index closed last week at 5,385.7 (its highest since June 2008 before the Global Financial Crisis), the Australian Dollar reached a high above 97 US cents (its highest for more than four months) and there was very encouraging news on the housing front with a record number of auctions in Melbourne last weekend and a strong clearance rate of over 80% in Sydney.
“Despite these positives, Treasurer Joe Hockey’s announcement last week that the Abbott Government plans to increase Australia’s debt ceiling to $500 billion (up 67% from the current debt ceiling of $300 billion) did remind everyone about Australia’s large federal budget deficit. Hockey explained the large increase was to avoid an Australian repeat of the instability seen recently in the US as American politicians argued about increasing the US debt ceiling.”
Here’s how the RMR consumer confidence index is tracking against the monthly Westpac-Melbourne Institute consumer sentiment index:
In light of the above, the latest down-tick in the RMR index was probably to be expected.
