(Australian Associated Press)
Consumer confidence has fallen below its long-term average level and is unlikely to recover until wage growth picks up, ANZ says.
The ANZ-Roy Morgan Consumer Confidence Index fell 1.24 per cent to a level of 111.2 points in the week ending April 23, closer to the 100-point level separating optimism and pessimism.
Confidence has now fallen below the level of 112.9, the long-run monthly average since 1990.
ANZ head of Australian economics David Plank said concerns about the wider economic outlook were likely stoking consumer pessimism.
“We think continued low wage growth is likely behind the weakness in these categories. Rising geopolitical risks might also have fed into households’ concerns about the outlook,” he said in statement.
Survey respondents were more downbeat about the wider economic outlook, with their views of economic conditions over the next year slumping 5.3 per cent.
Meanwhile, their feelings about conditions over the coming five years edged up 0.2 per cent after falling quite sharply the previous week.
Households were more pessimistic about their own finances as well, with their assessment of their current finances falling 1.2 per cent and their views of their future finances slipping 0.6 per cent.
Mr Plank said the weakness in consumer confidence contrasted with the more optimistic outlook of firms, the very high level of reported business conditions and strong employment figures in March.
“It is possible that we are in for a period of stronger job reports that further close the gap between the official figures and what surveys such as ANZ job ads and NAB business conditions are telling us,” Mr Plank said.
“This may be enough to prevent a further decline in consumer sentiment. But we doubt we will see a sustained improvement until income growth picks up.”