A recent report has revealed a drop in consumer confidence this week, slumping below its long-run average after a bounce back in the previous week.
The ANZ-Roy Morgan Australian Consumer Confidence report found consumer confidence has not maintained its buoyancy of previous weeks, dropping by 3.5 percentage points in the week ending 24 April.
The report showed that consumer confidence sat at 111.7, falling below its long-run monthly average of 112.7 since 1990.
This decline in sentiment most likely came off the back of Prime Minister Malcolm Turnbull’s confirmation that he would seek a double dissolution election in July.
The report also attributed the fall in confidence to consumers’ views towards the economic outlook, with both subindices on future economic conditions declining by 5 per cent.
Consumers’ views towards their personal finances also took a hit, falling by 3.3 percentage points last week while views regarding ‘whether now is a good time to buy a major household item’ dropped by 4.6 percentage points.
“It is disappointing to see consumer confidence fail to hold on to the previous week’s gain,” ANZ head of Australian economics Felicity Emmett said.
“This highlights how fragile consumer confidence is, particularly around the economic outlook.”
However, despite these results, Ms Emmett emphasised that any impact of budget-related news on consumer confidence “may be temporary”.
“In the coming week, budget-related news is likely to dominate,” she said.
“In recent years, the budget has had the most notable impact on consumers’ views towards the economy.
“[But] we don’t expect any significant policy surprises that will hit households’ pockets.”
[Related: The importance of consumer confidence]