The ANZ-Roy Morgan Research (RMR) consumer confidence index continues to languish following its Budget-induced shellacking, falling by a modest 0.3 points in the week ended 29 June to be around 7% below the long-run average reading of 113.7, and some 10% lower than at the end of April (see next chart).
However, consumer confidence is up around 6% from a month ago, which suggests that it is very gradually improving as the “sticker shock” from the Budget wears-off.
The below chart, which plots the most recent Westpac-Melbourne Institute’s Consumer Sentiment index against the ANZ-RM Consumer Confidence index, highlights the mood of the Australian consumer more clearly:
Both indices continue to warrant close monitoring in the months ahead. For if they fail to bounce back strongly, then it could have widespread negative impacts on the housing and retail sectors, and in the process thwart the RBA’s plans to rebalance the Australian economy away from mining.
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