Confidence fell by a massive 27.8% last week. This fall has bought the
headline index to just above the all-time lows recorded in 1990. Confidence is
17% below the lowest point seen during the global financial crisis (Oct 2008).
All the sub-components of the survey were plunged. 'Current financial
conditions' fell 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%.
'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 4.0%.
ANZ Head of Australian Economics, David Plank, commented:
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.
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.
