Consumer confidence drops sharply

Consumer confidence dropped by 3.9 per cent as a number of regions across the nation remained under a lockdown or with significant restrictions as the states attempted to contain the new COVID outbreak.

All the subindices registered a fall. ‘Current financial conditions’ fell 2.6 per cent, while ‘future financial conditions’ softened 1.9 per cent.

‘Current economic conditions’ declined 7.0 per cent, with the proportion of people expecting ‘good times’ for the economy less than those expecting ‘bad times’ for the first time since April. ‘Future economic conditions’ dropped 4.1 per cent.

‘Time to buy a major household item’ decreased by 4.4 per cent. ‘Weekly inflation expectations’ fell by 0.3ppt to 3.8 per cent, with the four-week moving average down 0.1ppt to 4.0 per cent. 

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"Consumer confidence dropped 3.9 per cent over the past week to its lowest level since the first week of April." ANZ Head of Australian Economics, David Plank said.

"The fall came as lockdowns and restrictions broadened across a number of states to control the spread of the more infectious Deltavariant of the pandemic."

"The drop in sentiment wasn’t confined to those areas directly impacted by restrictions. For instance, while it fell by 8.9 per cent in Sydney it also declined by 1.6 per cent in the rest of NSW."

"Confidence fell in most other cities as well: Brisbane (-7.7 per cent), Melbourne (-2.7 per cent) and Adelaide (-6.5 per cent). With the lockdowns in Brisbane and Perth coming to an end, we can expect confidence, and consumer spending, to rebound reasonably quickly given past experience, but much will depend on whether restrictions in Sydney are able to be eased."

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