- ANZ’s consumer sentiment survey fell sharply last week.
- ANZ economist David Plank cited political uncertainty as the main catalyst.
- The sub-index for future household finances fell to its lowest level of the year.
Malcolm Turnbull is still the Prime Minister, for now.
Turnbull fended off a leadership challenge from Peter Dutton this morning, winning a ballot vote 48-35.
But given more than 40% of Turnbull’s own party voted against him, questions remain about whether he can survive another leadership tilt from Dutton in the coming months.
It marks yet another round of uncertainty to grip Australian politics. And based on the results of ANZ’s latest consumer survey, Australian households are getting fed up with the relative lack of stability.
The ANZ-Roy Morgan consumer confidence index fell sharply by 3.5% last week.
While the index is subject to weekly volatility, the latest result marked the third straight week of falls:
The survey was carried out over the weekend, prior to this morning’s events. But it followed the results of the latest Fairfax-Ipsos poll on Friday, which showed another collapse in support for the Turnbull government.
And ANZ’s Head of Australian Economics, David Plank, attributed the falls to more political uncertainty.
“The decline in confidence may reflect the impact of the messy political debate locally and the associated slump in support for the current Turnbull government, as revealed in the recent Fairfax-Ipsos poll,” Plank said.
“The sharp fall in future (rather than current) conditions provides some evidence of this,” Plank said.
Confidence declined across all of the major sub-indexes, starting with a 1.3% fall in sentiment towards current household finances.
But it was the outlook for future household finances — defined as views towards financial conditions over the next five years — which had the most notable decline.
“Sentiment towards future financial conditions plummeted by -7.6% to its lowest level in a year,” ANZ said.
Sentiment towards the broader economy wasn’t much better. Views towards current economic conditions fell by 0.8%, while the five-year economic outlook tumbled by 5.3%.
In addition, last week’s falls came in the wake of a solid employment print for July, which showed the unemployment rate fell to its lowest level since 2012.
But that wasn’t enough to boost sentiment among households who continue to navigate the dual forces of low wage growth and high household debt, amid a cooling housing market. All while Canberra reels from another round of political infighting.
Plank added that “the considerable media focus on the impact of the drought may also have affected sentiment”.
The overall consumer confidence reading is now at 114.1 — still above its long-term average of 113 but down sharply from the four-week moving average of 117.8.
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