This weekly ANZ-Roy Morgan Consumer Confidence Rating is based on 1,035 face-to-face interviews conducted Australia-wide with men and women aged 14 and over last weekend April 23/24, 2016.
ANZ-Roy Morgan Australian Consumer Confidence dipped 3.5% to 111.7 this week, reversing the bounce in the previous week and falling back below its long run average. While the previous week’s bounce likely reflected positive news on the economy, a quiet data week failed to see sentiment hold onto those gains, highlighting how fragile confidence is at the moment. It is also possible that Turnbull’s confirmation that he will seek a double dissolution election (most likely on 2 July) may have weighed on sentiment.
ANZ Head of Australian Economics Felicity Emmett commented:
- The fall in confidence was largely driven by consumers’ views towards the economic outlook, with both sub-indices on future economic conditions dipping at least 5%.
- Consumers’ views towards their current personal finances appears to be on a downward trend recently, falling 3.3% last week, and are 6.5% below levels five weeks ago. In comparison, views towards the future personal situation were more optimistic, rising 1.3% last week (see Figures 3 and 4).
- Views towards ‘whether now is a good time to buy a major household item’ dipped 4.6%.
“It is disappointing to see consumer confidence fail to hold onto the previous week’s gain, particularly as there was no obvious trigger for the reversal. Confidence fell 3.5% last weekend and is now back below its long run average. It is not clear what drove confidence lower, but it seems that a quiet data week, even in the absence of negative news, was not enough to keep sentiment elevated. This highlights how fragile consumer confidence is, particularly around the economic outlook.
"In the coming week, Budget-related news is likely to dominate. In recent years, the Budget has had the most notable impact on consumers’ views towards the economy. We don’t expect any significant policy surprises that will hit households’ pockets, suggesting that any impact on confidence may be temporary.”
Gary Morgan, Executive Chairman, Roy Morgan Research says:
"This week's fall in ANZ-Roy Morgan Consumer Confidence to 11.7 (down 4.1pts) comes after a week of political uncertainty caused by the rejection of the Government's ABCC Bill by Senate cross-benchers that means Austrralia is set to head to an early Double Dissolution Federal Election on Saturday July 2 - Australia's first 'DD' Election for nearly 30 years since 1987.
"The fall in Consumer Confidence can be attributed to the economic uncertainty over closures of Arrium, Electrolux and continuing announcements of redundancies at several companies and is also not surprising when one considers the pressures on the Australian economy. Many of these issues are exarcebated by the Reserve Bank's insistence on keeping Australian interest rates much higher (currently at 2%) than comparable commodity economies in the world like Canada.
"Australia's high interest rates are a significant factor in why the Australian Dollar has increased in recent weeks to above 76 US cents - its highest in nearly a year - which is concerning for Australian exporters - including mining companies, and also leaving the Australian Government without the windfall benefit of the rising iron ore price. The high Australian Dollar is set to cause a further Federal Budget 'blowout' when Treasurer Scott Morrison hands down his first Federal Budget next Tuesday.
"The ABS Australian CPI figures released today show Australian Inflation falling in the March Quarter by 0.1% from the December Quarter 2015 - the first quarterly fall in inflation since the December Quarter 2008. The weak inflation result shows the negative impact of the high Australian Dollar, and high Australian interest rates, across the whole economy. The RBA must cut Australian interest rates next Tuesday before the Australian economy slows down any further."
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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.
You can also view our monitor of Monthly Australian Unemployment & Under-employment Estimates.
The week that was - April 18-24, 2016
- Clive Palmer denies taking money out of Queensland Nickel
- Turnbull accuses Conroy of 'disgracing himself' with Governor-General attack
- Doha oil deal failure sparks crude price plunge
- Turnbull gets election trigger as Senate blocks ABCC bill
- Clive Palmer may recontest Queensland seat of Fairfax
- Share market rallies on back of higher commodity, oil prices
- House prices fall in most cities as foreign buyer interest declines
- Crowds celebrate Queen Elizabeth's 90th birthday
- Unofficial election campaign begins as Turnbull gets his Federal Election trigger