Australian consumer confidence has dropped 9.8 per cent over the past week, bringing it to the lowest level since the ANZ-Roy Morgan Consumer Confidence began in 1973.
The COVID-19 pandemic has impacted every industry as consumers follow government advice to stay home and practice social distancing.
‘Current financial conditions’ fell 16.1 per cent. ‘Current economic conditions’ declined by 9.5 per cent, following last week’s 37 per cent decline, which is the weakest component of the survey. While ‘Future economic conditions’ were a bit calmer, falling just 2.4 per cent.
‘Future financial conditions’ was the only positive, gaining 0.6 per cent.
‘Time to buy a major household item’ also declined the most over the past week, dropping by 23.8 per cent. The four-week moving average for ‘inflation expectations’ was up by 0.1ppt to 4.1 per cent.
“Sentiment took a further hit over the past week, falling to the lowest ever level in the almost 50-year history of the survey. There were some glimmers of hope. ‘Future finances’ were up marginally and inflation expectations rose. In fact, there was a sharp uptick in the weekly reading of inflation expectations, which rose to 4.3 per cent,” ANZ head of Australian Economics, David Plank, commented.
“But we aren’t getting carried away. ‘Current economic conditions’ fell more than 9 per cent and are down close to 50 per cent over two weeks, to the lowest ever level. And most other aspects of the survey are exceptionally weak. The announcement of the largest fiscal package yet may stabilise confidence, but much will depend on the how the pandemic evolves.”
On Monday, the Government announced it will spend $130 billion to subsidise wages and ensure that the workers receive salaries to see stabilisation in confidence this week. While treasurer Josh Frydenberg also rolled out three consecutive fiscal stimulus packages.
Consumer are still stocking up on household essentials at grocery stores with sales of alcohol rising, according to Gareth Aird, economist, Commonwealth Bank of Australia. Spending on alcohol in the past week was 34 per cent higher than a year earlier, reported MarketWatch.