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Westpac consumer confidence survey drops to 47-year low
Consumer confidence has taken a battering in April, with a major bank sentiment survey revealing the sharpest drop in its 47-year history.
Westpac consumer confidence survey drops to 47-year low
Consumer confidence has taken a battering in April, with a major bank sentiment survey revealing the sharpest drop in its 47-year history.
Westpac-Melbourne Institute’s consumer confidence survey revealed an 18 per cent drop in confidence, which now sits at 75.6 – with a score of 100 or more suggesting consumers are positive about the future.
Consumers are now almost as gloomy as they were during the recession in the early 1990s, where confidence collapsed to 65 points.
Westpac chief economist Bill Evans explained that the drop in confidence was severe – it could’ve been much worse.
“Despite the bleak and threatening backdrop, Australia’s pandemic experience to date has been much less debilitating than that of the hardest hit areas abroad.”
“The number of cases is high but has not overwhelmed Australia’s health system, with recent evidence showing a clear slowing in new cases that indicates policy measures are working to contain the spread.”
“These developments give some support to our view that the Australian economy will lift in the December quarter following three consecutive quarters of economic contraction,” Mr Evans explained.
However, the ANZ-Roy Morgan consumer confidence survey, which is done weekly instead of monthly actually shows signs of improvement following massive falls in late March.
According to their results, confidence strengthened for the second week, with a close to 9 per cent gain to 78.2 coming off a week where confidence grew by 10 per cent.
ANZ head of Australian economics David Plank believes the government stimulus packages and the flatlining of the curve in recent weeks are seeing consumer confidence grow.
“Confidence is now up close to 20 per cent from the historic low reached over the last weekend in March. Despite this, it is still some way below the levels seen during the GFC.”
“The challenge for sentiment over the next few months is likely to be a deluge of poor economic data. We’ve already seen a taste of it this week, with the plunge in business confidence and conditions.”
“March employment data, due out later this week, may deliver more bad news, though the fact the survey week for the report was in early March means it is likely to be some way short of the disastrous labour market data we unfortunately expect to see in coming months," Mr Plank concluded.
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