September 13, 2022

ANZ-Roy Morgan Consumer Confidence drops by 0.4pts to 85.7 after RBA increases interest rates by 0.5% to 2.35%

Topic: Consumer Confidence
Finding No: 9065
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ANZ-Roy Morgan Consumer Confidence was down by 0.4pts to 85.7 this week and is now a large 17.4pts below the same week a year ago, September 11/12, 2021 (103.1). In addition, Consumer Confidence is now 5.3pts below the 2022 weekly average of 91.0.

The slight drop in Consumer Confidence was the smallest after an RBA interest rate increase since Consumer Confidence dropped by only 0.2pts after the RBA’s initial +0.25% interest rate increase in May. In the weeks after other interest rate increases Consumer Confidence dropped by 6.6pts (June), by 2.1pts (July) and by 3.8pts (August) – an average drop of 4.2pts for the three prior +0.5% increases.

There were mixed results across the index this week with two improving slightly, two declining and one unchanged. Those improving related to personal finances and whether now is a ‘good time to buy’ major household items whereas those declining related to the performance of the economy.

On a State-by-State basis there was also no clear trend with NSW, Queensland and Western Australia all down while Victoria and South Australia both increased slightly.

Current financial conditions

  • Now 25% of Australians (up 2ppts) say their families are ‘better off’ financially than this time last year compared to 41% (up 1ppt), that say their families are ‘worse off’ financially.

Future financial conditions

  • Looking forward, fewer than a third of Australians, 32% (up 2ppts), expect their family to be ‘better off’ financially this time next year and an equal number, 32% (up 2ppts), expect to be ‘worse off’.

Current economic conditions

  • Only 8% (unchanged) of Australians expect ‘good times’ for the Australian economy over the next twelve months compared to 33% (up 2ppts), that expect ‘bad times.’

Future economic conditions

  • In the longer term, just 13% (down 2ppts) of Australians are expecting ‘good times’ for the economy over the next five years compared to 18% (unchanged) expecting ‘bad times.’

Time to buy a major household item

  • When it comes to buying intentions now just 22% (up 1ppt) of Australians, say now is a ‘good time to buy’ major household items while 48% (unchanged), say now is a ‘bad time to buy’.

ANZ Head of Australian Economics, David Plank, commented:

Block Quote

Consumer confidence softened by just 0.5% last week, even as the RBA raised interest rates by 50bp. This is the smallest decline after a 50bp increase this year. The previous three 50bp increases in June, July and August saw an average decline in confidence of about 5%. It is possible that Lowe’s suggestion that the size of future rate increases might be smaller helped support confidence somewhat. Lower petrol prices may also be helping sentiment, with household inflation expectations dropping 0.1ppt to 5.3%. We wouldn’t read too much into the relative stability of sentiment, as the overall story remains the same – consumers are very pessimistic.

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

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Margin of Error

The margin of error to be allowed for in any estimate depends mainly on the number of interviews on which it is based. Margin of error gives indications of the likely range within which estimates would be 95% likely to fall, expressed as the number of percentage points above or below the actual estimate. Allowance for design effects (such as stratification and weighting) should be made as appropriate.

Sample Size Percentage Estimate
40% – 60% 25% or 75% 10% or 90% 5% or 95%
1,000 ±3.0 ±2.7 ±1.9 ±1.3
5,000 ±1.4 ±1.2 ±0.8 ±0.6
7,500 ±1.1 ±1.0 ±0.7 ±0.5
10,000 ±1.0 ±0.9 ±0.6 ±0.4
20,000 ±0.7 ±0.6 ±0.4 ±0.3
50,000 ±0.4 ±0.4 ±0.3 ±0.2
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