ANZ-Roy Morgan consumer confidence drops 5.8 points to 90.7 as inflation is reported higher than expected and interest rate hikes are expected

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This weekly ANZ-Roy Morgan Consumer Confidence Score is based on 1,521 online and telephone interviews conducted across Australia with 14-year-old men and women during the week of April 25 to May 1, 2022.

ANZ-Roy Morgan consumer confidence fell significantly this week, down 5.8 points to 90.7. It was the index’s biggest weekly decline since early January at the height of the COVID-19 ‘Omicron wave’ and came after the ABS reported a CPI of 5.1% for the year to March 2022 – the highest CPI in over 20 years since the introduction of the GST.

Consumer confidence is now at its lowest since the second wave of COVID-19 in Victoria in August 2020 and is significantly 22 points lower than the same week a year ago on May 1-2, 2021 (112.7 ). The measure also fell 7 points below the 2022 weekly average of 97.7.

A look at consumer confidence by housing status is telling with the measure down almost 10 points among those who are “paying down their house”. On the other hand, the decline was less significant for owners (-4.6 pts) and for tenants (-3.8 pts).

A look at the individual states shows that the fall has not been uniform across the country with significant falls in New South Wales, Queensland and South Australia only partially offset by increases in Victoria and Australia -Western.

A look at the index shows that it was metrics related to personal finance and whether now is a “good/bad time to buy major household items” that drove the decline this week with some indicators at their highest levels. low for more than two years since April 2020.

Current financial conditions

  • Now only a quarter of Australians, 24% (down 1ppt) say their families are “better off” financially than at this time last year, compared to 37% (up 4ppt), who say their families are “worse off” financially.

Future financial conditions

  • Looking ahead, less than a third of Australians, 31% (down 2ppts) expect their family to be “better off” financially this time next year (the lowest figure for this indicator for more than two years since April 2020) against just over a quarter, 27% (up 4 ppts), who expect to be “in worse shape” financially (the highest figure for this indicator for more than two years since April 2020).

Current economic conditions

  • Now only 10% (down 3ppt) of Australians expect “good times” for the Australian economy over the next twelve months, compared to 30% (up 5ppt) who expect “difficult times”.

Future economic conditions

  • Looking further ahead, only 15% (unchanged) of Australians expect a “good time” for the economy over the next five years, compared to 18% (down 1 point) who expect a hard time “.

It’s time to buy a major household item

  • The prospect of higher interest rates has led to deterioration in buying intentions this week, with 28% (down 4 ppts) of Australians saying now is the right time to buy major household items (the lowest figure for this indicator for more than two years since April 2020) while 42% (up 6ppts) say it’s a “bad time to buy”.

ANZ’s Australian Economics Director, David Plank, commented:

Consumer confidence plunged 6.0% last week, its biggest drop since dropping 7.6% in mid-January due to the Omicron surge. High inflation of 5.1% YoY was likely the main driver of declining confidence as it raises the prospect of an RBA interest rate hike in the near future. This is supported by the fact that confidence fell by 9.6% among people “paying off their mortgage”, while for people who are already homeowners or renters, confidence fell by 4.7% and 4, 2% respectively. Inflation expectations rose 0.2 ppt to 5.3% last week as average gasoline prices rose nationwide. This is the lowest level of consumer confidence at the start of a tightening cycle since inflation targeting began in the early 1990s. This could see the RBA tightening slower than the market is expecting. evaluate it.”

Related Research Reports

Roy Morgan’s latest monthly consumer confidence report is available on Roy Morgan’s online store. It provides demographic breakdowns for age, gender, state, region (capital cities/countries), generations, life cycle, socio-economic scale, work status, occupation, property , Voting Intent, Roy Morgan Value Segments and more.

Consumer Confidence – Australia Detailed Monthly Report.
Business Confidence – Australia Detailed Monthly Report.
Consumer Banking Satisfaction – Australia Monthly Report.

You can also check out our Australia Monthly Unemployment and Underemployment Estimates Monitor.

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