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ANZ-Roy Morgan Consumer Confidence falters on bush fires
January 07 2020
- Finding No.
Consumer Confidence Press Release
This weekly ANZ-Roy Morgan Consumer Confidence Rating is based on 1,007 face-to-face interviews conducted Australia-wide with men and women aged 14 and over the weekend January 4/5, 2020.
Confidence fell 1.7% last week, to its lowest level in more than four years. A drop in confidence at the start of the year is unusual and almost certainly reflects the impact of the catastrophic bush fires over the weekend.
ANZ Head of Australian Economics, David Plank, commented:
- Consistent with this, the weakness in confidence was due to a big drop in the economic outlook, while sentiment toward personal financial circumstances actually rose. ‘Current economic conditions’ were down by a massive 12.9%, while ‘future economic conditions’ fell 8.1%. Current economic conditions are at their lowest level since the global financial crisis, while sentiment toward the future economic outlook is at its lowest level since 1994.
- In contrast, financial conditions gained. ‘Current finances’ rose 4% while ‘future finances’ were up 0.3%.
- The ‘Time to buy a household item’ gained 4.8%, recovering from a fall of 6.4% seen in the last reading of the previous year. The four-week moving average of ‘inflation expectations’ was stable at 4.0%, though weekly readings saw a sharp fall, which should result in a weaker reading in the coming week.
"Against the backdrop of the weekend’s catastrophic bush fires it is not surprising that consumer confidence declined. But the reported decline of 1.7% since the last survey in mid-December understates the weakness when one considers that the New Year usually sees a strong gain in sentiment. Between 2010 and 2019, the average gain in confidence for the first week of January has been 3.4%. Against the usual seasonal gain of recent years, confidence has started 2020 in very poor shape and at its lowest level in more than four years.
The fact that this is due to sharp falls in both the current and future economic outlooks indicates to us that the bush fires are almost certainly the key cause. In contrast, consumers’ sentiment toward their own financial circumstances has actually risen since mid-December. This offers the prospect that the impact on overall consumer confidence from the weekend’s terrible events may be relatively short-lived. The policy steps taken by the federal government in recent days could contribute to that outcome. We are mindful, of course, that there is likely still bad news to come about the impact of last weekend’s fires. There is also a lot of hot and dry weather to come before the bushfire season is over.
The weakness in overall consumer sentiment suggests that consumer caution toward spending in recent months will continue, despite the relative health of their personal financial circumstances. We expect retail sales to have rebounded modestly in November, in part due to the Black Friday sales. But the boost may be short-lived."
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Related Research Reports
The latest Roy Morgan Consumer Confidence Monthly Report is available on the Roy Morgan Online Store. It provides demographic breakdowns for Age, Sex, State, Region (Capital Cities/ Country), Generations, Lifecycle, Socio-Economic Scale, Work Status, Occupation, Home Ownership, Voting Intention, Roy Morgan Value Segments and more
Consumer Confidence – Monthly Detailed Report in Australia.
Business Confidence – Monthly Detailed Report in Australia.
Consumer Banking Satisfaction - Monthly Report in Australia.
You can also view our monitor of Monthly Australian Unemployment & Under-employment Estimates
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