21 Dec 2022

ANZ-Roy Morgan confidence survey shows sharp skid in sentiment

12:53 pm on 21 December 2022
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A third confidence survey in two days has shown sentiment in the economy and households plunging off a cliff.

The ANZ-Roy Morgan December survey showed sentiment slid seven points to a deeply pessimistic 74, the lowest level since the survey began in 2004.

Just under a quarter surveyed said they were worse off financially now than a year ago and 10 percent expected to be worse off in a year's time.

A net 54 percent of respondents expected the economy to worsen and 33 percent said it was a bad time to buy a big ticket item.

ANZ senior economist Miles Workman said the Reserve Bank monetary statement last month with talk of recession and aggressive rate rises has taken its toll.

"That's clearly spooked the horses, but it's not yet clear exactly how far they have bolted."

"All eyes are now on the degree of follow-through from businesses reporting negative employment intentions, and consumers saying they will significantly tighten their belts."

The survey followed Westpac's fourth quarter survey showing consumer confidence at an all time low and ANZ's own business survey, which also hit a record low.

Workman said the headwinds facing households were getting stronger with rising interest rates biting into income and set to go higher, house prices expected to fall by more, unemployment to rise, and the economy expected to slip into recession.

"One relatively consistent theme over the past year or two is that actual consumer spending activity has been relatively robust compared to where one might expect this to land given consumers' reported willingness to spend and their general pessimism."

He said it was possible that the surveys reflected the initial shock of the RBNZ statement, and that the pessimism might recede.

"All up, today's data makes for some pretty grim reading to end the year on, but given the recent experience it's hard to gauge how much this will translate into weaker consumer activity."

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