Alboflation is going to break households before very long. Roy Morgan with the report.
ANZ-Roy Morgan Consumer Confidence dropped 3.5pts to 74.3 this week after the RBA raised interest rates by 0.25% to 4.3% – the highest official interest rates have been in 12 years.
Consumer Confidence is now at its lowest since mid-July 2023 and has spent a record 41 straight weeks below the mark of 85. Consumer Confidence is now 6.5pts below the same week a year ago, November 7-13, 2022 (80.8) and is now clearly below the 2023 weekly average of 78.0.
Looking around the States Consumer Confidence was down in NSW, Victoria, Queensland and South Australia, but up slightly against the trend in Western Australia – essentially a reverse of last week.
Driving this week’s decrease was a deterioration in people’s buying intentions after the interest rate rise and growing concerns about the long-term health of the Australian economy.
Current financial conditions
Now a fifth of Australians, 20% (unchanged) say their families are ‘better off’ financially than this time last year compared to a majority of 54% (up 2ppts) that say their families are ‘worse off’.
Future financial conditions
Looking forward, under a third of Australians, 28% (unchanged), expect their family to be ‘better off’ financially this time next year while 38% (up 1ppt), expect to be ‘worse off’.
Current economic conditions
Only 7% (up 1ppt) of Australians expect ‘good times’ for the Australian economy over the next twelve months compared to two-fifths, 40% (up 2ppts), that expect ‘bad times’.
Future economic conditions
Net sentiment regarding the Australian economy in the longer term has dropped this week with only 10% (down 1ppt) of Australians expecting ‘good times’ for the economy over the next five years compared to nearly a quarter, 24% (up 4ppts), expecting ‘bad times’ – the highest figure for this indicator for over three years since August 2020.
Net sentiment for the long-term indicator at (-14) is now at its lowest since April 2020 – at the start of the COVID-19 pandemic.
Time to buy a major household item
The burst of hope last week has been ‘snuffed out’ with buying intentions deteriorating this week following the RBA’s interest rate increase. Now only 18% (down 4ppts) of Australians say it is a ‘good time to buy’ major household items as we enter the Christmas retailing period while a growing majority of 55% (up 4ppts), say now is a ‘bad time to buy’.
More from Westpac.
- Westpac-Melbourne Institute Consumer Sentiment Index down 2.6%
- At 79.9, the Index has returned to deeply pessimistic levels.
- RBA rate rise knocked 6% off confidence during the survey week.
- Most consumers expect interest rates to rise further from here.
- Mortgage belt bracing for another difficult year ahead.
- Consumers set for a repeat of last year’s ‘penny-pinching’ Christmas.
- Labour market confidence, housing-related sentiment largely unchanged.
Life won’t be easy under Albanese.