The ANZ-Roy Morgan Research (RMR) consumer confidence index continues to languish following its Budget-induced shellacking, falling another 0.3 points in the week ended 6 July 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).
That said, the ANZ-RMR consumer confidence index is up nearly 6% from its post-Budget low, suggesting the consumer’s mood has improved as the “sticker shock” from the Budget has worn-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.
