Australian Consumer Confidence has plummeted to a 30-year low, says Roy Morgan in a market research update
Confidence fell by a massive 27.8% last week, the organisation reports, bringing the headline index to just above the all-time lows recorded in 1990.
Confidence is also 17% below the lowest point seen during the global financial crisis in October 2008.
All the sub-components of the survey recorded significant drops, with confidence in the “current financial conditions” falling by 23.9%, while ‘future financial conditions’ dropped 25.8%.
The economic conditions subindices were also down sharply, with ‘current economic conditions’ falling 37.1% and ‘future economic conditions’ declining by 19.1%.
The response that now was a good “time to buy a major household item’ fell the most, dropping by 37.2%. The four-week moving average for ‘inflation expectations’ was stable at 4%.
“The increasingly negative news about the impact of the coronavirus pandemic in Australia has had a dramatic impact on consumer sentiment, with confidence showing its biggest ever fall since the survey moved to a weekly basis in 2008,” said ANZ Head of Australian Economics, David Plank.
“Consumer confidence has been lower than this level, but only just and only during the 1990-91 recession.
“The plunge was broad-based, with all sub-components of sentiment well below average and well below the levels seen during the GFC. Only the levels seen during the 1990-91 recession are comparable.
“We should note that the coronavirus has necessitated a change in the survey methodology, away from face-to-face to phone and online interviews. It is possible that this impacted the results, though the consistency of the responses suggests this is unlikely.”
Business confidence is also dropping, with 56% of Australian businesses saying Australia is now in its first recession in three decades.
The special Roy Morgan SMS survey of 621 businesses showed that Queenslanders were the most negative about the business outlook, with 68% saying the country is now in recession.
56% of businesses with annual turnover of under $5 million and also over $5 million saying Australia is now in a recession.
Those who say Australia is in a recession cite the fact people are not spending money, what they call poor Governmental policies, the drop in confidence, falls in the share market and the Australian Dollar, and also the high levels of unemployment and under-employment.
The massive drop-offs in tourism and travel thanks to COVID-19 travel bans and quarantine periods has also been blamed.
Roy Morgan’s research also found that 79% of Australians agree that people who are in financial difficulty should be able to access up to $20,000 of their superannuation, in a special SMS survey.