The ANZ-Roy Morgan Consumer Confidence Index fell 2.4% this week, now 24.8% below the same week a year ago, with sentiment falling in most states, except Western Australia.
Personal financial and good or bad time to buy indicators drove the fall in the index.
When it comes to buying intentions, 22% of respondents said now is a ‘good time to buy’ major household items while more than twice as many, 48% up 3%, believe now is a ‘bad time to buy’.
ANZ head of Australian Economics, David Plank said the weaker Australian dollar, along with an uptick in petrol prices over the past couple of weeks, are likely to have led to the surge in household inflation expectations to 6%. “This weighed heavily on consumer sentiment, with the subindex that captures whether ‘it is a good time to buy a major household item’ dropping 6.2%.”
Very weak consumer confidence has not so far translated into lower household spending, he said, but the longer confidence remains low the greater the prospect that consumers will become more cautious. “Especially with household wealth going backwards due to lower house and equity prices.”