Australian consumer confidence has collapsed following last week’s shocking national accounts data, which reported the weakest aggregate and per capita GDP results since the early 1990s recession.
The ANZ-Roy Morgan consumer confidence index plunged 3.5 points last week to 77.0 points, to its lowest level this year.
The falls were broad-based, with ‘Current financial conditions’ (over last year) dropping 4.2 points, while ‘future financial conditions’ (next 12 months) declined by 4.9 points.
‘Short-term economic confidence’ (next 12 months) plunged 5.6 points and ‘medium-term economic confidence’ (next five years) fell by 1.4 points.
The ‘time to buy a major household item’ subindex also softened by 1.5 points.
ANZ Economist, Madeline Dunk, explained the result as follows:
ANZ-Roy Morgan Australian Consumer Confidence recorded its largest weekly fall of the year to drop below 80pts for the first time in six months.
There were broad-based declines across all subindices, possibly in response to last week’s GDP data which confirmed Australia’s economic growth is very weak.
Households were particularly wary about the year ahead, with subindices for the 12-month outlook for the economy and households’ own financial situation recording their largest weekly declines of the year. This leaves both subindices at their lowest levels since November.
Across the housing cohorts, confidence is at a 2024 low for households with a mortgage and those who own their home outright, but not for renters, despite a 6.3 point fall in confidence last week.
The consumer gloom makes sense, given that expectations of rate cuts have been pushed into early 2025.
Households are also contending with a weakening economy alongside renewed real wage declines.
It is a terrible economy for anybody who has a mortgage or is renting.
The only ones that are isolated are Australians who own their homes outright and continue to spend freely:
