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Consumer Confidence’s Sharp Drop Resembles 2020 Levels
Australian consumers are feeling the weight of ongoing lockdown, Roy Morgan has reported. Consumer confidence is experiencing its sharpest dip since March 2020, when the first lockdown measures were announced in Australia.
The continued lockdown measures in Greater Sydney and Victoria, and now SA, are playing a major role in this fall in consumer confidence, now sitting at 104.3. This 5.7 percent drop is well below the 2021 weekly average of 110.9 but remains 13.6 points above the same period last year (90.7).
“Consumer confidence fell by 5.2 percent as the lockdown in Sydney was tightened and extended and another lockdown was imposed in Melbourne,” shared David Plank, the ANZ Head of Australian Economics.
The most significant drops, surprisingly, have been in Adelaide and Perth, falling -9.5 percent and -8.2 percent, respectively. Confidence was also down in Sydney (-4.8 per cent and Melbourne (-3.7 percent). Furthermore, only 36 percent of Australian consumers say that now is a good time to buy a major household item, which is down seven ppts. In contrast, 30 percent of Australians say that now is a bad time to buy, which has lifted six ppts.
“The subindices that capture economic conditions and ‘time to buy a major household item’ are at their worst levels since early November 2020, highlighting some renewed caution of households – albeit nowhere near the lows seen in the early stage of the pandemic,” said Plank.
“The four-week moving average for inflation expectations has been at or above the 4.0 percent mark for the past five weeks, cementing the return to pre-COVID levels.”