The ANZ-Roy Morgan Research (RMR) consumer confidence index has been released for the week ended 4 May, which registered another big fall, tanking 4.7 points (-4.2%) to 106.3 points – the lowest level in five years and well below its long-term average (113.0). The index has now slumped 8% over the past two weeks:
This week’s fall in confidence was driven by a sharp decline in perceptions of “economic conditions next year”. According to ANZ:
The policies of most concern to the consumer spending outlook at this stage are the mooted temporary deficit reduction levy and the proposed changes to the eligibilities for welfare and pension payments…
These policies, if introduced, would impact consumption both directly and indirectly.
There is sure to be some temporary event pain in this reading but, importantly, it is within a broader downtrend so cannot be dismissed entirely.
The Westpac-Melbourne Institute is due to release its monthly gauge of consumer sentiment later this week, which will provide further insight on the mood of the Australian consumer.
