Consumer confidence decreased 1.2% last week, its lowest level since April 2020, although there were increases in sentiment in New South Wales and South Australia, but not in Victoria, Queensland and Western Australia.
Sub-index results from the latest ANZ Roy Morgan data were mostly down. Current financials fell to its lowest level since the start of the pandemic, while future financial conditions fell 4.2%, dropping 11.4% over the past three weeks. Current economic conditions were down 4.3%, however future economic conditions rose slightly.
There was some good news for retailers with the time to buy a major household item index rising 2.7%, after declining 11% over the previous three weeks.
According to ANZ head of Australian Economics, David Plank, the federal budget did not deliver a positive impact. “The Q3 CPI hitting a 32-year high has pushed household inflation expectations to 6.6%, their highest since February 2011,” he said.
The number of people who think they are financially worse off than the same time last year has risen to 47%, the highest value for this indicator in over three decades.
“Cost of living concerns, along with expectations of more rate hikes by the Reserve Bank has caused confidence to decline to levels last seen during the early weeks of the Covid lockdowns. This is also reflected in the 15.6% decline in confidence among people paying off their mortgages over the past six weeks.”
The continued decline in confidence seems to be having some impact on spending with ANZ data for October indicating the usual run-up in spending seen late in the month is not occurring, Plank said.