The ANZ-Roy Morgan consumer confidence index registered a small fall in the week ended 20 March 2016, declining 0.4 points 116.0 but still tracking above the long-run average of 112.7 (see next chart).
The overall fall in confidence was driven by a combination of households’ views towards their own finances, which fell by 3% last week, and reduced confidence in the 12-month outlook (down 5.7%).
According to Felicity Emmett, head of Australian economics at ANZ:
“At current levels, confidence looks quite healthy and is above its long run average”…
“The improving labour market is likely to be an important factor supporting confidence. Last week’s news that the unemployment rate dipped back to 5.8% was particularly encouraging. Moreover, equity markets continued to recover from their February lows and petrol prices remain low”…
“The government’s decision to bring forward the Budget has brought it into the spotlight, along with the prospect of a double dissolution election. The news flow around both these events over the next few months is likely to play an important role in shaping consumer confidence”…
The below chart plots the most recent Westpac-Melbourne Institute Consumer Sentiment index against the latest ANZ-RM Consumer Confidence index, with both diverging:
