The results of the latest ANZ-Roy Morgan Australian Consumer Confidence survey are bleak, with optimism over future economic conditions continuing to fall.
According to the data, consumer confidence dropped by 0.6 per cent in the week ending September 24.
“Consumers’ views towards current economic conditions remained unchanged (up 0.1 per cent),” the survey report said. “Meanwhile, consumers seem less optimistic about future economic conditions, with the sub-index falling 6.5 per cent last week.
“The four-week moving-average aggregate-economic-conditions index remains well below its long-run average (101.5 compared with 108.1).”
ANZ Senior Economist Felicity Emmett commented that although the changes in Australian attitudes towards future economic conditions were minor, they showed a steep decline in optimism when looked at over a broader time frame.
“Though the headline number [-0.6 per cent] showed little change last week,” she said, “there has been significant volatility in responses over the past few weeks, particularly in consumers’ views towards future economic conditions.
“Broadly, consumer confidence appears to be basing around its long-term average, supported by ongoing strength in the labour market and a more optimistic view of current conditions.
That said, consumers appear less optimistic about future conditions. This likely reflects expected stress in household balance sheets and budgets if wage growth remains weak in an environment of moderating house prices and high levels of household debt.
“These concerns are likely being exacerbated by the prospect of interest-rate hikes over the next year or so. As such, we see a pick-up in wage growth as the key to a sustained recovery in confidence.”