Confidence slides to lowest in four years

Consumer confidence fell to its lowest level in four years as people grew more wary about the future, but low interest rates mean people still think it’s a good time to buy bigticket items.

The ANZ-Roy Morgan consumer confidence index fell to 113.9 in September from 118.2 in August, and the current conditions index is down 1 point at 126. The future conditions index is down 6 points at 106.

Confidence remains below the historical average of 120 as “consumers are particularly wary about what the future may bring”, said ANZ chief economist Sharon Zollner.

Of the 1000 respondents to the survey, a net 11 per cent said they were better off now than they were a year ago, down from 16 per cent in August, and a net 23 per cent expect to be doing better in 12 months, down from 27 per cent in August.

Perceptions about the next year’s economic outlook for the country as a whole fell 9 points to a net 10 per cent expecting conditions to worsen, the lowest in four years.

However, a net 41 per cent still see this as a good time to buy big-ticket items versus 39 per cent in August.

Lower interest rates are probably behind the robustness in the proportion of people thinking it is a good time to buy a major household item, said Zollner. The tight labour market is another key support, although employment indicators have deteriorated markedly and are a future vulnerability, she added.

Those surveyed still expect house prices to lift by 2.8 per cent a year, unchanged from the previous month.