This weekly ANZ-Roy Morgan Consumer Confidence Rating is based on 976 face-to-face interviews conducted Australia-wide with men and women aged 14 and over last weekend February 27/28, 2016.
ANZ-Roy Morgan Australian Consumer confidence fell 2.6% to 111.3 this week. The modest recovery in confidence seen in the previous three weeks proved to be short-lived. Confidence is now back to the levels seen post the financial market volatility in January and below its long run average.
ANZ Chief Economist Warren Hogan commented:
- The weakness in confidence this week was largely driven by consumers’ views towards the economic outlook. The subindex ‘economic outlook in the next 5 years’ fell 7.2% and ‘economic outlook in the next 12 months’ fell 6.3%.
- Consumers’ views towards their finances were mixed. Confidence in the current financial situation fell 2.7% following increases in the previous three weeks, while confidence in the future financial situation rose (+0.4%) for the third consecutive week.
“ANZ-Roy Morgan Consumer Confidence has dipped as concerns around the economic outlook come back into play. The heightening debate on tax policy, with its focus on negative gearing and house prices, looks to be creating some uncertainty around the outlook for households. The Government’s ability to deliver a clear and credible economic platform is clearly important for consumers, and the delivery of a coherent tax policy will be an important part of that platform.
"Encouragingly, consumers remain optimistic about their current finances, with the re-energised property market a likely factor here. Auction clearance rates have begun the year on a better note even as sales volumes have returned towards more normal levels. The important question is whether this resurgence in housing translates into stronger household spending in an environment of low wages and inflation. This is critical to meet the RBA’s expectation of consumption growth returning to above trend growth. In today’s meeting, the RBA board is widely expected to keep policy rates on hold.”
Gary Morgan, Executive Chairman, Roy Morgan Research says:
"This week's turndown in ANZ-Roy Morgan Consumer Confidence - down 3pts to 111.3 - reflects the uncertainty we have seen from the Turnbull Government in regards to their taxation policies and reforms heading towards this year's Federal Budget, and soon after, a Federal Election.
"As released by the ABS Business Indicators yesterday the end of the mining boom in Australia has seen the main driver of the Australian economy switch over to real estate. In the last quarter real estate produced $8.6 billion of taxable profit - more than double the taxable mining profit for the quarter of $3.6 billion.
"The growing importance of the real estate industry to the Australian economy shows the 'cash economy' is becoming bigger than ever as more taxation revenue is lost to 'cash-in-hand' work carried out by illegal migrants (on holiday visas), tradespersons and contractors working in the real estate industry.
"The only way to prevent the 'cash economy' becoming an even bigger drag on the Australian economy and productivity is serious industrial relations reform which brings the huge Australian 'cash economy' into the legitimate Australian economy. Unfortunately to date, there has been little sign that the Turnbull Government wishes to tackle this issue."
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You can also view our monitor of Monthly Australian Unemployment & Under-employment Estimates.