(Australian Associated Press)
Financial market routs are spooking consumers, with confidence below its long-run average for the first time in almost four months.
The ANZ-Roy Morgan consumer confidence index fell 0.9 per cent in the week ending January 24, and is down 3.6 per cent over the past three weeks.
“Australians’ perceptions of the economic environment continue to be highly sensitive to bad news on the global economy and markets,” ANZ chief economist Warren Hogan said.
He said short-term perceptions about the economy in particular had been in a downtrend for two months.
“The recent financial volatility has only made matters worse,” he said.
People’s views about the economic outlook continues to weigh on overall confidence, with the sub-index falling 13.5 per cent since early December.
Another drag was the measure on whether consumers felt now was a good time to buy a major household item, which has fallen 7.9 per cent over the past three weeks.
“(However) consumers’ views towards their current personal finances, a measure most correlated with household spending, remains elevated,” Mr Hogan said.
This likely reflects strong domestic fundamentals like low inflation and interest rates, falling petrol prices and rising employment, he said.
“This suggests to us that consumer spending should remain firm in early 2016 despite the weakness in overall consumer sentiment,” he said.
But ANZ is concerned that the housing sector and business investment will be headwinds to growth and may hamper confidence as the year progresses.