Consumer confidence unchanged ahead of the budget
After two consecutive weeks of declines, consumer confidence was virtually unchanged in the week ending 29th April, up to 111.3 from 111.2 the previous week– just below its long- run average.
The uptick in confidence was underpinned by some improvement in households’ views towards the economic outlook. After falling sharply the previous week, households’ expectations for economic conditions in the next 12 months rose 2.0%; while expectations for economic conditions over the next five years also ticked higher, up 0.7% last week.
Households’ views towards their finances were mixed: sentiment about current finances rose 2.6% last week; while views about future finances fell a sharp 3.6%.
The ‘good time to buy a household item’ declined for the third consecutive week, edging 0.2% lower.
Inflation expectations jumped to 4.6%, with the four week moving average edging higher at 4.4%.
ANZ’S HEAD OF AUSTRALIAN ECONOMICS DAVID PLANK COMMENTED:
“Despite last week’s uptick, household sentiment remains subdued. Confidence has averaged 112.2 in April, down from 113.2 in March, 116.7 in February and a high of 118.6 in January this year.
Most of the fall in average consumer confidence for the month of April was driven by some deterioration in households’ optimism towards the longer-term outlook and concerns around the economy. While some weakness in sentiment was likely the result of rising geopolitical fears, more structural factors (high household debt, low wage growth) are likely weighing on confidence.
In the coming week, the RBA statement and Budget-related news are likely to dominate. In recent years, the Budget has had a notable impact on consumers’ views towards the economy. We don’t expect any significant policy surprises that will hit households’ pockets in this year’s Budget, suggesting that any impact on confidence from this event may be modest.”
