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Consumer confidence declined 3.2% last week, driven lower by weakness in economic conditions, placing the Roy Morgan ANZ Index at a five-and-a-half year low.

Current economic conditions had a significant decline of 16.6%, and in percentage terms, the downturn was the largest since January 2009 while the ‘future economic conditions’ index declined 2.9%. Household purchase intentions remain in the doldrums with the ‘time to buy a major household item’ index falling 3.8%. However, in contrast to the weakness in economic conditions, confidence in financial conditions rose 3.8%.

Not surprisingly the coronavirus has impacted the consumer confidence picture in a big way.

“The virus induced sell-off in the local and global stock markets and the big drop in the Chinese PMI likely contributed to the weakness,” ANZ head of Australian Economics, David Plank said.

“The fall seen in current economic conditions shows that Australians are getting skittish about the well-being of the economy, though they are still quite content about their personal financial circumstances.”

Plank said this divergence remains the most notable aspect of the confidence survey. “So far the negative economic outlook has been a better guide to household spending than more positive financial sentiment,” he said.