The ANZ-Roy Morgan consumer confidence index fell by 2.5 points to 113.2 in the week ended 29 May 2016, and is now tracking just above the long-run average of 112.8 (see next chart).
The fall in overall confidence was driven by pessimism surrounding the economic outlook, with the sub-index measuring economic conditions in the year ahead falling by 6.6%, whereas the sub-index measuring conditions five years ahead fell by 2.4%.
Jo Masters, senior economist at the ANZ, labelled the result “disappointing”:
“…consumers appear to be increasingly nervous about the outlook for the economy and their finances in 12 months. It’s not clear what has driven this, given recent positive performances in both property and equity markets”.
“It is, however, possible that the election campaign is starting to weigh on confidence.”
Masters also believes that this week’s data flow, including the March quarter national accounts, will go a long way to shaping consumer confidence in the period ahead.
The below chart, which plots the most recent Westpac-Melbourne Institute Consumer Sentiment index against the latest ANZ-RM Consumer Confidence index, shows both indices displaying slight optimism and tracking each other fairly closely:
