An ongoing weakness in consumer confidence is being driven by households’ concerns about both current and future economic conditions, according to fresh figures from ANZ.
According to the latest ANZ-Roy Morgan Australian Consumer Confidence analysis, consumer confidence fell by 1.0 per cent last week, bringing the index to its lowest value since April 2016.
ANZ said that the weakness in confidence was driven by households’ concerns about both current and future economic conditions.
Households’ views on the 12-month economic outlook fell 3.3 per cent last week, after a “sharp” 5.2 per cent fall in the previous week.
Commenting on the results, ANZ head of Australian economics David Plank said: “The downward trend in confidence since late January is disappointing given the broadly supportive economic conditions – the solid Q4 GDP report, an improving current account, strong housing market and above trend business conditions.”
Mr Plank elaborated that in ANZ’s view, concerns about labour market conditions have likely weighed on confidence over the past few weeks.
“Continued soft wages growth is likely a factor and last week’s reported rise in the unemployment rate for February may have weakened confidence, not least by further dampening income expectations,” he said.
“Despite decent strength on the activity side of the economy, low wage growth remains a key downside risk to both the inflation and spending outlook over 2017, in our view.”
[Related: Consumers’ views on finances drop]