Both consumer and business confidence are below the 2021 average as lockdowns continue across Australian states, but remain above the average 2020 levels.
Business confidence has sunk by 13.4 percent as Melbourne and Sydney’s lockdown measures continue. While these figures are not as low as 2020, it now sits at 101.5, well below the long-term average of 113.8.
According to Roy Morgan, about 47.9 percent of businesses say that they expect the next 12 months will be a good time to invest in growing the business, with 44.1 percent saying that they expect to be better off this time next year.
“Business Confidence plunged 15.7pts (-13.4 percent) to 101.5 in August, its biggest monthly drop since April 2020 at the start of the COVID-19 pandemic. The measure of sentiment amongst Australian businesses is now at its lowest since October 2020 during Victoria’s long second lockdown,” said Michele Levine, CEO of Roy Morgan.
“The levels of Business Confidence around Australia are closely related to the lockdown status of each State. The lowest Business Confidence is in NSW (97.8), in which the Greater Sydney area has now spent over two months in lockdown, while second-lowest Victoria (98.2) has now been in lockdown for nearly a month since early August.”
The industry that has experienced the largest boost in confidence over the last 12 months is retail, Roy Morgan explained. It is currently sitting at 117.6, which has nearly doubled from last year, up 54pts.
Consumer confidence has remained ‘virtually unchanged’ across Australia, the company reported. sitting at 101.8. This is likely due to the vaccination rates increasing, despite lockdowns continuing. Compared to the same time last year, it is 11.6 points higher but remains well below the 2021 weekly average of 109.2.
David Plank, the ANZ Head of Australian Economics, explained that despite cases rising in Sydney, confidence lifted slightly. “Consumer confidence rose 0.2 percent last week despite rising COVID case numbers. Sentiment in Sydney gained 0.9 percent, as daily case numbers rose above 1,000 for the first time.
“Confidence fell in Brisbane (-1.6 percent), Melbourne (-1.9 percent), Adelaide (-8.6 percent) and Perth (-0.8 percent). The overall steady outlook may reflect the increasing vaccination rates across the country and the hope that this will eventually bring lockdowns and border closures to an end,” he said.
Around 37 percent of Australian consumers expect to be ‘better off’ financially this time next year, but only 12 percent expect ‘good times’ for the Australian economy in the next five years. Approximately 35 percent of consumers say that now is a good time to buy a major household item, whereas 33 percent say the opposite – these figures remain unchanged.
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