The ANZ-Roy Morgan consumer confidence index fell 1.7 per cent to a level of 116.8 last week, but it remains above the monthly average since 1990 of 112.8.
ANZ head of Australian economics Felicity Emmett said turmoil in financial markets and concerns over the global economic outlook following the UK’s vote to leave the EU pushed confidence only marginally lower.
“The strength in confidence reflects the solid momentum in Australia’s economy,” she said.
“The improvement in the labour market is likely to be a key factor behind the recent improvement in confidence, in addition to low interest rates and the ongoing strength in the housing market which are supporting households healthy assessment of their own finances.”
The survey said the slight drop in confidence in the week was largely driven by a deterioration in consumers’ views about the short-term economic outlook.
Respondents were 9.0 per cent less optimistic about economic conditions in the next 12 months, however they were only 0.9 per cent less positive about conditions over the next five years.
Meanwhile, consumers’ views about their current finances compared to one year ago declined by 2.3 per cent.
But they were actually 2.7 per cent more optimistic about their finances over the next 12 months.
Emmett said that despite most local consumers remaining upbeat, Australia was still vulnerable to the fortunes of the global economy.
“Global volatility is the biggest driver of local uncertainty, and with our measure of uncertainty picking up sharply recently we will be closely monitoring further developments in confidence,” she added.
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