Consumer confidence slipped just 0.4% on the weekend before Melbourne entered Stage 4 restrictions, according to the latest ANZ-Roy Morgan data. Not surprisingly it was lowest in Melbourne, slightly higher than in Sydney. Only in Perth is consumer confidence in positive territory while it sits marginally above the national average in Adelaide and Brisbane.
Overall consumer confidence is now 27.2% lower than a year ago and driving the fall this week were declines in confidence about the performance of the Australian economy over next year and the next five years. However, the number of consumers likely to purchase a major household item increased 2%.
Despite the decline seen since the onset of the second wave in Victoria, the severity of the fall has been less than in March, at least so far, suggesting Australians have become somewhat accustomed to the ‘new normal’, ANZ head of Australian Economics David Plank said. “Fiscal support is also critical, with sentiment toward personal financial conditions holding up much better than expectations about the economy as a whole. The plan to reduce this support may test this relative resilience,” he said.
But it was a different story for business with confidence plunging 11.3% in July, led by large drops in Victoria, Queensland and South Australia. The fall was driven by businesses becoming increasingly concerned about economic prospects. Retail and wholesale experienced the largest declines in confidence while transport, postal and warehousing, the most confident industries.
According to Roy Morgan CEO, Michele Levine the best news to come from the latest results was that businesses are still significantly more positive than negative about their own prospects over the next 12 months. “Over 43% expect to be better off financially this time next year, compared to 23.9% that expect to be worse off,” she said.