Consumer confidence has plunged to 113.6 (down 5.3pts since April 27/28, 2013), according to the weekly Roy Morgan confidence poll.
In other concerning poll results for the retail auto industry, less Australians (36%, down 6%) expect to be ‘better off’ financially over the next 12 months (the lowest since August 11/12, 2012) – while 13% (down 1%) expect their family to be ‘worse off’ financially.
The confidence level is the lowest since mid-November 2012 after prime minister Julia Gillard announced a $12 billion budget deficit and medicare levy increase for NDIS
Confidence is, however, 3.3pts higher than at the same time a year ago when it was 110.3 (May 5/6, 2012). This week’s fall in consumer confidence has been driven by decreasing confidence across all parts of the survey.
Fewer Australians 26% (down 7%) expect ‘good times’ over the next twelve months for the Australian economy (the lowest since September 8/9, 2012) compared to 30% (up 3%) that expect ‘bad times’ economically (the highest since December 15/16, 2012).
Over the longer-term now 30% (down 4%) of Australians expect ‘good times’ for the Australian economy over the next five years (the lowest since June 11/12, 2011) compared to 20% (up 1%) that expect Australia to have ‘bad times’ (the highest since December 8/9, 2012).
Australians are also more worried about their personal finances compared to this time last year with 29% (down 1%) of Australians saying they are ‘better off’ financially than this time last year compared to 29% (up 3%) that say they are ‘worse off’ financially.
Now 56% (down 1%) of Australians say now is a ‘good time to buy’ major household items compared to 17% (up 2%) that say now is a ‘bad time to buy’.
Gary Morgan says: “The RBA’s decision to cut interest rates to an historic low of 2.75% is a step in the right direction to restoring confidence and stimulating the Australian economy ahead of next week’s federal budget. In spite of the interest rate cut, Australian interest rates are still higher than in our nearest neighbour New Zealand (2.5%) and far higher than the comparable resource rich country of Canada (1%).
“Because of the high level of real unemployment and under-employment in Australia, (2.31 million Australians were unemployed or under-employed in March according to the Roy Morgan monthly employment estimates), I have been calling for lower interest rates in Australia for months.
“Dropping interest rates will take the upward pressure off the high Australian dollar and help support the Australian economy as mining investment weakens. However, it is critically important that the RBA continue cutting interest rates at its next meeting in June,” adds Morgan.
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