The ANZ-Roy Morgan consumer confidence index has fallen for a fourth consecutive week, down 0.5% to 76.5.
It was the third consecutive week that confidence was below 80, with the index tracking at its lowest level since April 2020 during the national lockdown:
Three of the five subindices fell, with ‘Time to buy a major household item’ dropping 3.5pts to its lowest since early April 2020:
The above sub-index is most likely to correlate most strongly with retail sales, suggesting a significant fall in discretionary spending in the period ahead.
Commenting on the result, ANZ Senior Economist, Adelaide Timbrell, noted that “the index, in four of the past five weeks, was among the ten worst results since the COVID outbreak”.
“Confidence among those paying off their mortgages fell 4.3pt and are at their lowest since the beginning of the monetary tightening cycle”, Timbrell said.
“Confidence among renters and outright homeowners rose a little”.
“The proportion of people saying it is ‘a bad time to buy a major household item’ rose to 55%, its highest since early April 2020”.
“Confidence about current finances increased 0.9pts but was still at its second lowest level since the initial COVID outbreak in Australia”, Timbrell concluded.
Confidence among mortgage holders should continue to worsen over the next few months given the number of cheap fixed rate loans due to expire will rise precipitously in April and in May:
On the other hand, there is a good chance the RBA has finished hiking, which should boost the spirits of mortgage holders.
