Australian Consumer Confidence Remains Below Pre-Pandemic Levels

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Sydney, Australia — September 21, 2021

Australian consumer confidence has shown a slight increase over the past week, but it still lags behind the levels observed during the worst days of the Covid-19 pandemic. According to a survey conducted by ANZ Bank and pollster Roy Morgan, consumer confidence has risen by 2.3 points in the last week. However, it has maintained a relatively narrow range between 75 and 78.5 points for the past six weeks.

Even during the Delta lockdowns that heavily impacted the economy in mid-2021, consumer confidence managed to reach scores of 80 points. Despite positive developments such as robust hiring activity and expectations of stable official interest rates in the foreseeable future, consumers are grappling with the burden of increasing living costs and dwindling real wages, as highlighted in the survey findings.

The pain is particularly acute for households transitioning from ultra-low fixed interest rates to significantly higher variable interest rates. This transition has contributed to a decline in consumer confidence. Additionally, falling real wages due to inflation have acted as a significant offset to the positive aspects of the economy, thus explaining the persistently weak performance of the confidence index over the past six months, remarked ANZ Senior Economist Adelaide Timbrell.

Overall, while there have been some improvements, Australian consumers continue to face challenges that prevent a full recovery in confidence levels. The effects of rising living costs and shrinking real wages remain key concerns for individuals and households alike.

Australian Women’s Football Team Shines in FIFA World Cup

Despite the recent news that Australia’s women’s football team finished fourth in the FIFA World Cup, their highest-ever ranking, consumer confidence in the country remains low.

However, there is a glimmer of hope for the Reserve Bank of Australia, as weekly inflation expectations have decreased by 0.3 percentage points to 5.2%. The four-week moving average has also slightly softened to 5.3% from 5.4%, according to a survey.

While sentiment regarding current financial conditions remains unchanged, there has been a significant rise of 5.0 points in future financial conditions, surpassing the previous week’s decline of 4.2 points.

Furthermore, current economic conditions saw a notable increase of 3.0 points last week, and there was also a slight rise of 0.9 points in future economic conditions. Consumers displayed increased optimism when it came to purchasing major household appliances, with a corresponding increase of 3.0 points.

The weekly ANZ-Roy Morgan Australian consumer confidence rating is based on 1,519 interviews conducted both online and over the telephone throughout the week up until Sunday.

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