Worries about the economy ahead of next week’s federal budget have dented consumer spirits.
The ANZ-Roy Morgan consumer confidence index fell 3.5 per cent in the week ending April 24, reversing the previous week’s gains and falling back below the long-run average.
CommSec chief economist Craig James says uncertainty surrounding the May 3 budget was behind the fall.
“The good news is that in a week’s time the federal budget measures and changes to policy will be revealed, and businesses and households will have one less thing to worry about,” he said.
In recent years, the budget has had the biggest impact on consumers’ perceptions of the economic outlook, ANZ’s head of Australian economics Felicity Emmett said.
Respondents’ views of the economy over the next 12 months and the next five years both plunged at least five per cent, the survey showed.
“We don’t expect any significant policy surprises that will hit households’ pockets, suggesting that any impact on confidence may be temporary,” she said.
Prime Minister Malcolm Turnbull’s confirmation that he will likely seek a double dissolution election on July 2 may have also dampened spirits, Ms Emmett said.
And CommSec expects the looming election to weigh on sentiment levels over the next few months.
Respondents’ views towards their current finances are on a downward trend, sliding 3.3 per cent last week and down 6.5 per cent below levels five weeks ago.
But respondents were more optimistic about their future financial situation, with that measure up 1.3 per cent.
The subindex on whether now is a good time to buy a major household item slumped 4.6 per cent.