After two successive gains, new outbreaks of Covid-19 in NSW and Queensland resulted in a 2% decline in consumer confidence this past week.
Driving the fall in the latest ANZ-Roy Morgan data was decreasing confidence across all five indices led by confidence dropping about personal financial situations. There was also a slight fall in the number of consumers wanting to purchase a major household item.
ANZ head of Australian Economics, David Plank said the weakness was predominantly due to declines outside of Victoria and New South Wales. “Confidence is now below the neutral level of 100 in all the major cities, but encouragingly, confidence actually rose in Victoria. The continued drop in new Covid-19 cases in Melbourne may be giving hope that the severity of the lockdown can be eased as planned,” he said.
However, confidence may be challenged by the expected confirmation this week that Australia’s economy contracted at a record rate in the second quarter, Plank said.