Roy Morgan: 31% of Australians say they’ll be ‘better off’ financially this time next year
Consumer Confidence is now at its lowest since Victoria’s second wave of COVID-19 in August 2020 and is a significant 22 points below the same week a year ago, according to Roy Morgan’s Consumer Confidence report which dropped last week.
Now just a quarter of Australians, 24%, say their families are ‘better off’ financially than this time last year compared to 37% (up 4 percentage points), who say their families are ‘worse off’ financially.
Looking forward, under a third of Australians, 31% (down 2 ppts) expect their family to be ‘better off’ financially this time next year (the lowest figure for this indicator for over two years since April 2020) compared to just over a quarter, 27% (up 4 ppts), that expect to be ‘worse off’ financially (the highest figure for this indicator for over two years since April 2020).
Meanwhile, under a third of Australians, 31% (down 2 ppts) expect their family to be ‘better off’ financially this time next year (the lowest figure for this indicator for over two years since April 2020) compared to just over a quarter, 27% (up 4 ppts), that expect to be ‘worse off’ financially (the highest figure for this indicator for over two years since April 2020).
In the longer term, just 15% (unchanged) of Australians are expecting ‘good times’ for the economy over the next five years compared to 18% (down 1 ppt) expecting ‘bad times’.
The prospect of interest rates increasing has led to buying intentions deteriorating this week, with 28% (down 4ppts) of Australians, saying now is a ‘good time to buy’ major household items (the lowest figure for this indicator for over two years since April 2020) while 42% (up 6ppts) say now is a ‘bad time to buy’.
A look at Consumer Confidence by housing status is revealing with the measure down almost 10 pts amongst those ‘paying off their home’. In contrast, the fall was of a smaller magnitude for those who own their own home (down 4.6 pts) and for those who are renting (down 3.8 pts).
Furthermore, a look at the different States showed the fall was not uniform around the nation with large falls in NSW, Queensland and South Australia only partly offset by increases in Victoria and Western Australia.
A look at the index shows it is measures related to personal finances and whether now is a ‘good/bad time to buy major household items’ that led the move lower this week with some indicators at their lowest levels for over two years since April 2020.
ANZ head of Australian economics, David Plank, commented: “Consumer confidence plunged 6.0% last week, its sharpest fall since the 7.6% drop in mid-January due to the Omicron surge. The strong inflation result of 5.1% y/y was likely the primary driver of the drop in confidence as it increases the prospect of interest rate hikes by the RBA in the near future.
“This is supported by the fact confidence dropped 9.6% amongst people ‘paying off their home loan’, while for people who already own their home or are renting confidence dropped by 4.7% and 4.2% respectively. Inflation expectations increased 0.2 ppt to 5.3% last week as average petrol prices rose nationally.
This is the lowest level for consumer confidence at the start of a tightening cycle since the inflation targeting regime began in the early 1990s. This may see the RBA tighten more slowly than the market is pricing.”
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