The ANZ-Roy Morgan Consumer Confidence survey has been released for last weekend, which shows that confidence plunged 5.7 points to 104.3 – the lowest reading since early November 2020:
Consumer confidence dropped 5.2% last week, its sharpest weekly fall since late March 2020. The fall follows the extension and tightening of the Sydney lockdown and the fifth lockdown in Melbourne. While the decline was sharp, confidence is still well above the levels seen through the first phase of the pandemic in 2020.
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Four out of five of the sub indices fell significantly. ‘Current financial conditions’ was the only component to register a gain of 1.2%, while ‘future financial conditions’ lost 3.4%.
‘Current economic conditions’ dropped 7.9%, while ‘future economic conditions’ decreased by 4.5%.
‘Time to buy a major household item’ plunged 10.5%. ‘Weekly inflation expectations’ increased by 0.1ppt to 4.2%, keeping the four-week moving average steady at 4.1%.
According to ANZ Head of Australian Economics, David Plank:
Consumer confidence fell by 5.2% as the lockdown in Sydney was tightened and extended and another lockdown was imposed in Melbourne. Confidence actually dropped the most in Adelaide (-9.5%) and Perth (-8.2%) and was also down sharply in Sydney (-4.8%) and Melbourne (-3.7%).
The sub-indices that capture economic conditions and ‘time to buy a major household item’ are at their worst levels since early November 2020, highlighting some renewed caution of households – albeit nowhere near the lows seen in the early stage of the pandemic. The four-week moving average for inflation expectations has been at or above the 4.0% mark for the past five weeks, cementing the return to pre-COVID levels.