Australia ANZ-Roy Morgan consumer confidence dip, remains above its long-run average

Australia ANZ-Roy Morgan consumer confidence fell in the week ending May 29, partially reversing the 3.6 percent rise in the previous four weeks, marking the first decline since mid-April. However, the consumer confidence remained 0.4 percent well above its long run average.

The ANZ-Roy Morgan consumer confidence index skidded 2.2 percent to 113.2. Confidence remained marginally above the series’ long-run average of 112.8, something that is formulated on data going back to 1990.

Consumer perceptions towards the economic outlook soured during the beginning of the week with a reasonable April unemployment report that was released just before the survey was conducted. That raised hopes of an economic comeback.

The sub-index measuring economic conditions in the next 12 months tumbled 6.6 percent, amplifying the decline in expectations looking five years ahead which slid by a smaller 2.4 percent. Meanwhile, readings on consumer finances came in mixed, with a 4.7 percent decline in expectations for the year ahead partially offset by a 0.7 percent improvement in views towards current finances.

"It is disappointing to see confidence retrace much of the gains of the last four weeks. Looking at the detail, consumers appear to be increasingly nervous about the outlook for the economy and their finances in 12 months," said Jo Masters, Senior Economist, ANZ Research.

Consumers’ views towards their financial situation were mixed. Consumers were less optimistic about their future finances, driving it a sharp down 4.7 percent, which was slightly offset by a 0.7 percent increase towards current finances.

In contrast, the final component of the survey, whether this seems the correct time to buy a household item or not, rose 1.9 percent to 136.5, a more than four-month high, since Jan 10, 2016.

Lastly, there remains a plenty of economic data coming this week to provide the consumers a hint of how the economy has performed recently. While consumer spending and the housing sector are likely to have contributed to economic growth, business investment remains weak and will continue to be a drag on activity, ANZ reported.

The gross domestic product data, due Wednesday will guide on further consumer sentiments in the near term.