Aug 03, 2021
August 10, 2021
Consumer confidence drops into pessimistic territory
Consumer confidence lost 3.1 per cent last week as new snap lockdowns were imposed in south-east Queensland and in Victoria. Critically, confidence dropped below the neutral level of 100 for the first time since the weekend of 31 October/1 November 2020 – just after the end of Victoria’s long second lockdown.
Among the subindices, financial conditions declined, with ‘current financial conditions’ down 5.7 per cent and ‘future financial conditions’ losing 4.8 per cent.
Economic conditions improved after falling for three weeks. ‘Current economic conditions’ gained 3.8 per cent, while ‘future economic conditions’ rose 0.9 per cent.
‘Time to buy a major household item’ dropped 8.3 per cent. ‘Weekly inflation expectations’ rose 0.1ppt to 4.3 per cent, pushing the four-week moving average up 0.1ppt to 4.3 per cent.
"Consumer confidence dropped by 3.1 per cent last week as fresh lockdowns were announced in parts of Queensland and Victoria." ANZ Head of Australian Economics, David Plank said.
"As a result, confidence dropped by 7.5 per cent in Brisbane and 1.6 per cent in Melbourne."
"Sydney and the rest of NSW, on the other hand, saw an increase in confidence of 3.7 per cent and 2.1 per cent respectively as the vaccination rate picked up and some restrictions on construction work were eased."
"Sentiment is still above the level reached during Victoria’s long second lockdown, but it is now in pessimistic territory for the first time since early November last year. Our research suggests we can’t be sure the low in confidence in the current cycle has been reached until COVID case numbers start to trend lower."
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