Consumer confidence edged down by 0.9% to 116.4 in the week ending 12 February – its second straight fall. The decrease was driven primarily by declines in sentiment toward both financial and economic conditions over the next 12 months.
Households’ views of current finances improved by 1.0% whereas sentiment towards future finances fell by 1.8%. Both indicators remain well above their long run averages.
Households’ views of economic conditions over the next 12 months deteriorated by 3.8%, partially unwinding the 5.7% bounce over the previous two weeks. Sentiment regarding economic conditions over the next five years edged down 0.7% this week after a solid 4.7% rise the previous week.
The ‘good time to buy a household item’ sub-index was broadly flat (+0.1%).
ANZ’S HEAD OF AUSTRALIAN ECONOMICS DAVID PLANK COMMENTED:
“The slight fall in consumer confidence this week is somewhat disappointing, given the recent positive data around business conditions and house prices as well as some recovery in domestic stock prices.
The deterioration in the financial and economic outlooks over the next 12 months may reflect the current global policy uncertainty as well as downward revisions to growth in last week’s Statement on Monetary Policy. Overall, however, confidence remains above trend and is likely to remain elevated in the longer term in our view, supported by solid economic fundamentals and accommodative monetary conditions. Importantly, confidence in current finances appears to have stabilised.
The labour force report on Thursday has the potential to impact confidence in the near term. We expect a solid rise in employment given the strength in business conditions and leading employment indicators.”