ANZ-Roy Morgan Australian Consumer Confidence fell 3.5% last week to 115.3, following a 2.6% decline in the previous week.
For the second straight week all subindices posted declines, with sentiment around economic conditions dropping sharply.
Views towards current economic conditions fell 5.5% last week, on the back of a 6% decline previously, bringing the sub-index to an eight-week low of 107.0. Similarly, perceptions of future economic conditions took an 8.8% dive to 106.3 (a 13-week low).
Consumers were less optimistic about financial conditions this week. Views towards current and future conditions fell 1.6% and 1.3% respectively last week, following a 2.6% and 1.8% fall previously. That said, both indices remain above their long term averages.
Sentiment around the ‘time to buy a household item’ fell for the fifth consecutive week, slipping 0.9% to 135.6. Inflation expectations remained steady at 4.4% on a four-week basis.
ANZ’S HEAD OF AUSTRALIAN ECONOMICS, DAVID PLANK, COMMENTED:
“Confidence fell further last week, adding to the decline seen the previous week on the back of equity market volatility.
Given the strong gain in consumer sentiment it was probably inevitable that at some point we were going to see a reasonable correction. Events in Canberra may have added to the downward pressure, especially given the level of media attention.
Importantly, however, even after the losses of the past couple of weeks consumer sentiment is still relatively elevated. And most sub-indices remain above their long-run averages.
The deterioration in views towards financial conditions, particularly current conditions, is a little worrying. In the last few weeks, views towards current conditions have retraced about half of their gains since their recent low point in mid-2017 (Fig. 3). It is likely that household finances will remain under pressure until a material pick-up in wage growth and as such household consumption remains an area of uncertainty in the outlook for 2018.”