Australian consumer confidence experienced a significant decline last week, triggered by the Reserve Bank of Australia’s (RBA) decision to raise interest rates. The ANZ-Roy Morgan consumer confidence index decreased by 3.6 points, settling at 76.9, marking its lowest level since December 2023. The four-week moving average also saw a decrease, falling by 1.9 points to 80.2.
According to ANZ, the drop in confidence coincided with the RBA’s move to increase the cash rate to 3.85 per cent. The report noted that survey respondents may not have all been surveyed following this decision. This level mirrors the low confidence observed in December 2023, which followed the RBA’s increase of the cash rate to 4.35 per cent in November 2023. ANZ is one of Australia’s largest banks. Roy Morgan is Australia’s best known and longest established market research and polling company.
The most significant declines were observed in economic outlook. Short-term economic confidence regarding the coming 12 months fell by 5.1 points, while medium-term confidence for the next five years dropped by 5.7 points. This decline pushed five-year economic confidence to its lowest point in the 25 years that data has been tracked. Household finances also reflected this downturn, with the index measuring current financial conditions over the past year falling by 4.1 points. Expectations for financial conditions in the coming 12 months also decreased, dropping by 1.6 points.
ANZ economist Sophia Angala noted that confidence declined across all housing cohorts. Outright home owners showed the most substantial drop, with a 5.0-point decrease, while those currently paying off their homes now represent the least confident group among those surveyed.
