- Views towards current household finances fell to the lowest level in eight weeks.
- Despite the falls, the sub-indexes for sentiment towards both financial and economic conditions remains above their long-term average.
The ANZ-Roy Morgan consumer confidence index ended May on a weaker note, posting back-to-back falls to end the month.
The index fell by 1% to a reading of 116.5, after a 3.2% slump in the week prior, which ANZ partly attributed to uncertainty about falling house prices.
And those lingering concerns were still evident last week, as views towards current household finances fell by 2% to reading of 105 — the lowest level in eight weeks.
Sentiment towards current finances “is likely weighed down by high petrol prices and concerns about falling capital city house prices,” said David Plank, ANZ’s Head of Australian Economics.
In addition, views towards the broader economy slumped by 4.2% last week, while sentiment towards future economic conditions dipped by 3.4% to a reading of 108.6 — also a two-month low.
Plank said simmering international trade tensions may have contributed to the poor result.
“The increased pessimism toward Australian economic conditions may stem from renewed fears of a trade war as the US ended exemptions for the EU, Canada and Mexico on steel and aluminium tariffs,” he said.
On a brighter note, last week’s announcement by the Fair Work Commission of a 3.5% increase to the minimum wage — effective from July 1 — boosted the outlook for future financial conditions.
Views towards household finances over the next five years rose by 3.3%, partially reversing last week’s 4.1% fall.
“Though confidence has deteriorated recently, views towards both financial and economic conditions remain above their long-term averages,” Plank said.
“Looking forward, the GDP release later this week is likely to influence confidence in the near term though global political concerns could also play a role.”