Consumer confidence hit another record low amid a "perfect storm" of pandemic disruption and economic hardship.
ANZ senior economist Miles Workman says consumers are under pressure. Photo: 123RF
The ANZ-Roy Morgan Consumer Confidence Index for March is down four points to 77.9, the lowest since the survey began in 2004.
A net 26 percent of households think it is a terrible time to buy a major household item, down five points from from February.
ANZ senior economist Miles Workman said consumers were under pressure on several fronts.
"Omicron disruption is impacting sentiment, it's limiting people's mobility ... but there's also rising living costs with CPI inflation very high and poised to rise even further," he said.
Rising interest rates and a retreating housing market was also putting pressure on households.
Household inflation expectations also hit the second highest on record at 6 percent, and with business inflation expectations already at a record 5.5 percent, Workman said it was a challenge for the Reserve Bank.
"We're in a situation now where high inflation is at risk of becoming embedded simply because it's getting to wage and price setting behaviour and once that happens, that core inflation can drift away from the central bank," Workman said.
"When it drifts away it can actually mean if they don't do something aggressive early, they may have to be even more aggressive later."
The proportion of people who believed it was a good time to buy a major item, a key economic indicator in the survey, also plunged to a record low.
Workman said while retailers had enjoyed strong demand to date, the survey suggested stormier times laid ahead.
"With a net 26 percent of people thinking it is now a bad time major household item, that's down over 50 points from its historic average.
"This indicator is probably the best indicator in the entire survey for predicting momentum in retail sales growth, so it does suggest broadly speaking the economy is coming off this high level and 2022 is going to be a weaker year."
