Australian consumer confidence continued to slide last week, continuing to weaken from the highs seen earlier this year.
And politics may be one factor contributing to the recent decline.
The ANZ-Roy Morgan consumer confidence index fell by a further 0.7%, taking its decline from early January to 5.8%.
At 113.1, the index now sits just above its long-run average, with the survey’s four-week moving average — a better guide to the overall trend given it eliminates week-to-week volatility — sliding to 115.0, the lowest level since May 2016.
ANZ described the result as “mixed”, perhaps an appropriate description given the somewhat confusing views expressed towards finances and the economy.
“Households’ views towards their current finances improved 3.1%, while views towards future finances dropped 3.4%,” said ANZ, noting that the latter is now at its lowest level since October 2016.
Those divergent views were replicated in sentiment towards the economic outlook.
“While views on the 12-month economic outlook fell a sharp 5.2% last week, consumers were slightly more optimistic about the 5-year outlook, which posted a 0.8% rise,” it said.
The final component within the survey — whether now was a good time to buy a major household item — bounced by 1.3% having plunged by 6.5% in the previous week.
Felicity Emmett, senior economist at the ANZ, said that the recent decline in confidence levels was likely driven by concern over the outlook for wages along with domestic political concerns.
“Ongoing elevated unemployment, as well as persistent weakness in wage growth, is likely to have weighed on confidence over the past few weeks,” she said, acknowledging that the recent announcement by the Fair Work Commission that penalty rates in retail and hospitality industries will be cut is also likely to have been a factor.
She also said that the Western Australian election result and poor polling for the Turnbull government indicated some “disenchantment with the Liberal-National Coalition.”