ANZ-Roy Morgan Consumer Confidence dropped 0.9 points to 83.0 this week, with ANZ economist Madeline Dunk saying the tax cuts are offsetting further declines.
Consumer confidence has now spent a record 81 straight weeks below the mark of 85. The index is now 7.2 points above the same week a year ago and 2.1 points above the 2024 weekly average of 81.9.
The driver of this week’s decrease was a fall in confidence about buying conditions – falling to its lowest for over a month.
Now nearly a quarter of Australians (23 per cent - down 1ppt), say their families are ‘better off’ financially than this time last year compared to 47 per cent (unchanged) that say their families are ‘worse off’.
Nearly a third of respondents (32 per cent - unchanged) of Australians expecting their family to be ‘better off’ financially this time next year, which is equal to the 32 per cent (down 1ppt) who are expecting to be ‘worse off’.
Just 8 per cent (down 1ppt) of Australians expect ‘good times’ for the Australian economy over the next twelve months compared to 33 per cent (down 1ppt) that expect ‘bad times’.
Meanwhile, 11 per cent (up 1ppt) of Australians are expecting ‘good times’ for the economy over the next five years compared to 18 per cent (down 1ppt) expecting ‘bad times’.
Buying intentions dropped to their lowest in a month, with only a fifth of Australians (20 per cent - down 4ppts) saying now is a ‘good time to buy’ major household items compared to a large plurality of 49 per cent (up 2ppts) that say now is a ‘bad time to buy’ major household items.
Dunk said the overall fall was driven by a fall in the ‘time to buy a major household item’ subindex.
“The current financial situation subindex also declined 1.9 points, but it is still up 5.2 points over the past two weeks and 9.6 points compared to the start of July,” Dunk said. “Despite some volatility in the week-to-week data, it appears the Stage 3 tax cuts are supporting confidence.
Notably, inflation expectations fell to 4.7 per cent, their lowest level since January 2022, before inflation picked up materially in Australia.
“It’s been a bumpy path down for inflation expectations since the peak of 6.8 per cent in November 2022, and that bumpiness has been evident in other measures like the NAB business survey’s price measures.
“The NAB measures are now consistent with inflation sitting around 2.5 per cent. We’ll be watching to see if inflation expectations continue to moderate over the coming weeks.”
A look at consumer confidence by state shows the index decreasing in most states including New South Wales, Victoria, Western Australia and South Australia, but up slightly in Queensland.