ANZ-Roy Morgan Consumer Confidence up 2.1pts to 88.6 as new cases of COVID-19 in Victoria continue decline from August 5 peak

ANZ-Roy Morgan Consumer Confidence was up 2.1pts to 88.6 on August 15/16, 2020 – the first increase in the index for more than two months since mid-June. Consumer Confidence increased in Melbourne by 5.1pts to 86.1 this week as new cases of COVID-19 have trended down significantly in Victoria since reaching a peak on Wednesday August 5. Melbourne still has the lowest Consumer Confidence of all major capital cities behind Sydney (up 3.3pts to 88.4), Brisbane (down 2.6pts to 88.9), Adelaide (up 4.9pts to 90.1) and Perth up 2.4pts to 97.3.

However, Consumer Confidence is still 24.2pts lower than a year ago on the comparable weekend of August 17/18, 2019 (112.8) and 5.4pts below the 2020 weekly average of 94.0. Driving the increase this week was increasing confidence, and fewer concerns, about personal financial situations and Australia’s economic performance over the next year.

Current financial conditions

• Now 24% (down 2ppts) of Australians say their families are ‘better off’ financially than this time last year and 35% (unchanged) say their families are ‘worse off’ financially.

Future financial conditions

• In addition, 34% (up 2ppts) of Australians expect their family to be ‘better off’ financially this time next year compared to 19% (down 3ppts) that expect to be ‘worse off’ financially.

Current economic conditions

• An increasing 6% (up 1ppt) expect ‘good times’ for the Australian economy over the next 12 months while a slim majority of 51% (down 4ppts), expect ‘bad times’.

Future financial conditions

• In the longer term, only 16% (unchanged) of Australians are expecting ‘good times’ for the Australian economy over the next five years compared to 22% (down 1ppt) expecting ‘bad times’.

Time to buy a major household item

• However, a decreasing proportion of Australians, 29% (down 2ppts), say now is a ‘good time to buy’ major household items, while 39% (down 3ppts), say now is a ‘bad time to buy’.

ANZ Head of Australian Economics, David Plank, commented:

"Confidence strengthened last week as the rate of growth in COVID-19 cases declined in Melbourne and Sydney. The positive July labour market data, which was better than market expectations, may have contributed to the lift in sentiment. Confidence of Melbourne consumers lifted the most, but is still the lowest of the major capital cities. The move higher follows seven straight weeks of falls, so a tick up was due; and with confidence remaining at a level that is well below average we aren’t getting too carried away by the positive result. Consumers are still very cautious about the outlook."

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