ANZ-Roy Morgan Consumer Confidence slips 0.5 pts to 91.6 after Melbourne forced back into lockdown after surge of COVID-19 cases

ANZ-Roy Morgan Consumer Confidence dropped 0.5pts to 91.6 this week – and is now at its lowest for over two months since May 9/10, 2020 (90.3). Consumer Confidence is now 24.3pts lower than a year ago on the comparable weekend of July 13/14, 2019 (115.9) and 3.3pts below the 2020 weekly average of 94.9.

Driving the fall this week was a decline in confidence about whether now is a good or bad ‘time to buy major household items’.

Current financial conditions

• Now 21% (down 2ppts) of Australians say their families are ‘better off’ financially than this time last year and 34% (down 3ppts) say their families are ‘worse off’ financially.

Future financial conditions

• In addition 34% (down 1ppt) of Australians expect their family to be ‘better off’ financially this time next year compared to 18% (unchanged) that expect to be ‘worse off’ financially.

Current economic conditions

• However just 7% (unchanged) expect ‘good times’ for the Australian economy over the next 12 months while 48% (up 2ppts), expect ‘bad times’.

Future financial conditions

• In the longer term, 19% (up 2ppts) of Australians are expecting ‘good times’ for the Australian economy over the next five years compared to 20% (up 1ppt) expecting ‘bad times’.

Time to buy a major household item

• Meanwhile a decreasing number of Australians, 33% (down 2ppts), say now is a ‘good time to buy’ major household items, while 36% (unchanged), say now is a ‘bad time to buy’.

The four-week moving average for ‘inflation expectations’ was stable at 3.2%.

"Confidence declined further last week, building on the falls seen over the previous two weeks. Consumer confidence is now down some 6% from its level in mid-June as it recovered from the historic low seen at the end of March. The deteriorating conditions in Melbourne and the renewed lockdown are most likely the primary contributor to the turn in sentiment. The biggest fall has been in ‘current economic’ conditions, which are down around 15% over this period. In contrast, sentiment toward personal finances is close to unchanged, highlighting the role that the massive fiscal stimulus has played in shielding people from the direct fall-out of the economic slump triggered by the health response to the pandemic. How this fiscal support will evolve over the months ahead is the most critical decision facing the Government and the economy."