From RM today comes the rapidly diminishing consumer:
The weekly Roy Morgan Consumer Confidence Rating fell to 111.8 (down 2.8pts in a week since December 7/8, 2013). The fall in confidence was driven by respondents having less confidence about economic conditions in Australia over the next 12 months and the next five years.
Now 37% (up 6%) of Australians expect ‘bad times’ for the Australian economy over the next 12 months (the highest since June 23/23, 2013) and just 28% (down 1%) expect ‘good times’.
In addition now 26% (up 4%) of Australians expect ‘bad times’ for the Australian economy over the next five years (the highest since March 14/15, 2009) compared to 32% (down 2%) that expect ‘good times’.
A decreasing majority of Australians 51% (down 1%) say now is a ‘good time to buy’ major household items while 20% (up 2%) of Australians say now is a ‘bad time to buy’.
Compared to this time last year now 31% (unchanged) of Australians say they are ‘better off’ financially and 26% (up 1%) say they are ‘worse off’ financially.
However Australians are more confident about their personal finances over the next 12 months with 41% (up 2%) of Australians expecting to be ‘better off’ financially this time next year compared to only 15% (down 1%) that expect their family to be ‘worse off’ financially.
Gary Morgan says:
“Consumer Confidence has fallen for the second straight week to 111.8 (down 2.8pts this week and 8.3pts in a fortnight) after Holden announced it was closing its Australian manufacturing plants at the end of 2017. The news from Holden follows the retrenchment of 1,000 employees by Qantas and means Consumer Confidence is now at its lowest since August 4/5, 2012 (111.0).
“Driving Consumer Confidence lower were worries about the economy with 37% (up 6%) of Australians expect ‘bad times’ for the Australian economy over the next 12 months and 26% (up 4%) expect ‘bad times’ over the next five years – the highest since March 14/15, 2009.
In short, this fall will not include the MYEFO blow so next week should be interesting.
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.
