The ANZ-Roy Morgan consumer confidence index registered its third consecutive fall in the week ended 3 April 2016, declining another 1.1 points to 113.4, although it is still tracking just above the long-run average of 112.7 (see next chart).
The fall in overall confidence was driven by declines in the sub-indices measuring the economic outlook, with perceptions surrounding the five year economic outlook slumping by 7.6%, whereas views towards the economic outlook in the year ahead declined by 0.8%.
Felicity Emmett, head of Australian economics at the ANZ, suggested the fall in confidence was driven by recent weakeness in economic data along with ongoing Budget uncertainty:
“Disappointing news flow around the economy seems to be creating uncertainty about the economic outlook for households. Employment growth has slowed, retail sales have disappointed and house prices have softened”…
“Moreover, government machinations in the lead-up to the Commonwealth Budget may be weighing on the outlook for households. With the Coalition now behind in the polls and Prime Minister Turnbull’s personal ratings falling, optimism over the potential for the current government to implement lasting reform seems to be fading.”
Thus ends the Turnbull ‘sugar hit’.
The below chart plots the most recent Westpac-Melbourne Institute Consumer Sentiment index against the latest ANZ-RM Consumer Confidence index, with the Westpac survey still showing more pessimism:
