Australia Markets close in 3 hrs 58 mins

Confidence crumbles to four-year low: ANZ

Michael Mehr
Optimism about the five-year outlook for Australia's economy has hit a new low in an ANZ survey

Consumer confidence slumped to a four-year low on the weekend, according to a survey that suggests people are bracing for more grim economic times.

The ANZ-Roy Morgan Australian Consumer Confidence index fell 2.8 per cent from the previous week, with respondents' positive views of the economy over the next 12 months falling 1.3 per cent and sentiment about conditions during the next five years plummeting 4.6 per cent to an all time low.

The weekly measure of consumer mood, which is based on about 1,000 face-to-face interviews conducted on Saturdays and Sundays, also registered a 4.4 per cent decline in how people thought about the outlook for their family's finances during the next 12 months.

The numbers released on Tuesday indicated a sharp deterioration of sentiment, with the latest poll's "time to buy a major household item" metric sliding 3.3 per cent to below the decade-long trough touched in September.

The overall consumer confidence index was at its lowest level since September 2015, perceptions about the economy over the forthcoming year sank to depths last recorded in February 2016 and pessimism about the five-year period was the most extreme since the weekly version of the survey started in August 2008.

"Spurred by weakness in economic conditions and the 'time to buy a household item' sub-index, overall consumer confidence fell further and is now at its lowest level in more than four years," ANZ economist David Plank said.

"The weakness continues to be driven by a very pessimistic economic outlook. Indeed, consumer views on the future economic outlook are now at their lowest in the history of the survey," he said.

"This now seems to be impacting sentiment toward consumers' own finances, with future expectations of financial conditions now below average."

CommSec economist Craig James said the survey results would worry businesses hoping for customers in the run up to the Christmas period.

"The latest consumer confidence data offers no joy for retailers. Retailers must work extra hard to secure the affection of consumers," Mr James said.