Australian Consumer Confidence Stays at Historic Lows

Australian consumer confidence remains at historic lows, according to the latest ANZ-Roy Morgan Consumer Confidence index. The index held steady at 67.7, barely moving from the previous week’s 68. It stands 16.3 points below last year’s level and 4.3 points under the 2026 weekly average of 72.

ANZ economist Sophia Angala noted that the index recorded its twelfth-lowest result since 1973. The only positive trend was in buying intentions. The percentage of respondents who believe it’s a good time to purchase major household items rose by three points to 17 percent. Conversely, those who think it’s a bad time dropped by three points to 44 percent.

Angala suggested this shift might reflect households making purchases while inflation expectations remain high. However, this improvement was offset by weaker economic sentiment. Nearly half of Australians now expect bad economic times in the next 12 months, while only 5 percent anticipate good times. Over the next five years, 6 percent foresee good times, and 32 percent expect bad times.

The softer economic outlook is linked to easing labor market conditions. The unemployment rate rose in September to its highest level since 2021. Household finances are also under strain, with 56 percent reporting they are worse off than a year ago, compared to 15 percent who feel better off. Looking ahead, 44 percent expect to be worse off next year, while 20 percent anticipate improvement.

Confidence varied by state, falling in New South Wales, Victoria, and South Australia, but rising slightly in Queensland and Western Australia. This follows several volatile weeks for sentiment, with confidence dropping 6.8 points over three weeks around the Reserve Bank’s decision to raise the cash rate to 4.60 percent, its highest in over 15 years. It briefly hit 67.1, the tenth-lowest in the series’ history, before recovering by 0.9 points.

ANZ predicts a slow recovery in spending. They expect the Reserve Bank to raise the cash rate by another 25 basis points in November, citing the central bank’s concerns about inflation risks. This would push the cash rate to 4.85 percent, its highest since 2008, likely further dampening consumer spending.