Consumer confidence has deteriorated in the last week on worried that social restrictions could return following the spike in coronavirus cases in Victoria.
The ANZ-Roy Morgan Australian Consumer Confidence survey dropped 4.6 per cent to 93 points, the biggest weekly decline since late-March.
The level is still far better than its low point of 65.3 in March, when fears about the pandemic were the highest but the sharp weekly decline means confidence remains well below the long-term average.
“The surge in COVID-19 cases in Victoria has dented consumer confidence,” ANZ senior economist Catherine Birch said.
Victoria recorded nearly 100 new coronavirus cases over the weekend and another 75 on Monday, in the biggest resurgence since March.
The consumer confidence survey is based on 1,410 interviews conducted online and over the telephone at the weekend.
Each of the sub-indices declined during the last week.
The respondents’ sentiment about current economic conditions slid 10.6 per cent while sentiment for “future economic conditions” also declined 5.2 per cent.
“Confidence in ‘current economic conditions’ fell sharply, suggesting that households are worried about the prospect of a return to tighter lockdowns and the impact of a second wave on the economy,” Ms Birch said.
Confidence about current financial condition fell 2.2 per cent while the indicator for their expectation of “future financial conditions” also slipped 1.9 per cent.
Confidence about ‘time to buy a major household item’ fell 4.9 per cent compared to a gain of 4.1 per cent in the previous week.
However, the four-week moving average for ‘inflation expectations’ was nearly stable at 3.2 per cent.