SYDNEY – Australian consumer confidence fell 7.6% last week to the lowest level since the economy experienced a damaging recession in the early 1990s, according to a survey by ANZ Bank and pollster Roy Morgan.
David Plank, head of ANZ’s Australian economics department, said news of the Reserve Bank of Australia raising official interest rates by 50 basis points last week surprised many and severely shook confidence.
Confidence is at its lowest since early April 2020, during the early stages of the Covid-19 pandemic. Outside of the pandemic, consumer confidence hasn’t been this low since January 1991, in the midst of the early 1990s recession, Plank added.
The percentage of respondents expecting good times for the economy over the next five years reflects the bad mood and has fallen to 10%, the lowest on record, he said.
So far this year, household spending has been resilient despite weak consumer confidence. The RBA, for example, will look closely to see if this divergence can sustain, Plank added.
Weekly inflation expectations fell 0.1 percentage point to 5.6%, while its four-week moving average was unchanged at 5.5%, the survey showed.
Sentiment on current financial conditions fell 1.0%, while future financial conditions fell 10.1%. Current economic conditions slipped 7.2% after losing 9.4% the week before. Future economic conditions declined 4.6%, according to the survey.
Consumers also reported a 14.4% decrease in their willingness to purchase an essential household item.
The weekly ANZ-Roy Morgan Australian Consumer Confidence Rating is based on 1,454 interviews conducted online and by phone during the week ended Sunday.
https://www.marketwatch.com/story/australian-consumer-confidence-drops-to-recessionary-levels-271655249411?rss=1&siteid=rss Australian consumer confidence slips to recessionary levels