One-fifth of workers looking to change jobs
Nearly 20 per cent of Australian workers are actively looking to change jobs.READ MORE
The ANZ-Roy Morgan Consumer Confidence rose for the third consecutive week while business confidence fell for the third straight month for the first time since August 2021 during the NSW and Victorian lockdowns.
Consumers were feeling more confident although there were early signs of a drop in the index in all states except Queensland and South Australia.
Four of the five confidence subindices registered gains. “Current financial conditions” rose a touch by 0.5 per cent, while “future financial conditions” increased 5.3 per cent.
“Current economic conditions” gained 1 per cent. “Future economic conditions” rebounded 3.6 per cent almost reversing the 3.9 per cent fall the week before.
This week’s increase was put down due to more positive views on personal finances and the Australian economy’s performance over the next year.
Now 23 per cent of Australians (unchanged) said their families are “better off” financially than this time last year compared to 42 per cent (down 1ppt), who said their families are “worse off” financially.
Looking forward, fewer than a third of Australians, 32 per cent (up 2ppts), expect their family to be “better off” financially this time next year compared to 32 per cent (down 3ppts), who expect to be “worse off”.
However, only 7 per cent (up 1ppt) of Australians expect “good times” for the Australian economy over the next 12 months compared to 39 per cent (unchanged), who expect “bad times”.
In the longer term, just 12 per cent (up 1ppt) of Australians are expecting “good times” for the economy over the next five years compared to 18 per cent (down 2ppts) expecting “bad times”.
ANZ head of Australian economics, David Plank, said consumer confidence rose despite news that headline inflation exceeded 6 per cent in the year to June.
“The sharp fall in petrol prices over the past three weeks may have been more important for sentiment,” he said.
“The drop likely explains why household inflation expectations fell 0.5ppt to 5.5 per cent. The only confidence subindex that decreased was ‘good time to buy a major household item’ – ongoing weakness in the housing market and pressure on household budgets being likely reasons. Despite the gain in the past three weeks, sentiment remains at a very low level and vulnerable to more tightening from the RBA.”
Meanwhile, the Business Confidence Index was 94.9 (down 2.4pts since May) and with the rise in the cash rate again on Tuesday (2 August) to 1.85 per cent, that is expected to drop again.
Australia’s interest rates (1.85 per cent) are now the highest they have been for over six years since May 2016 (2 per cent).
The monthly decline in business confidence was driven by a fall in confidence about the prospects for the Australian economy over the next five years with only 37.6 per cent of businesses now expecting “good times” for the economy over the next five years, down 2ppts from a month ago.
However, despite the monthly fall, businesses are still more optimistic than pessimistic when it comes to their own business prospects. A plurality of 41.4 per cent (down 0.1ppts) expect the business to be “better off” this time next year and a rising plurality of 38.8 per cent (up 0.2ppts) said the business is “better off” financially than this time a year ago.
The index has dropped by more than 20pts in five states but is virtually unchanged in NSW at 104.9, down only 0.4pts (-0.4 per cent) on a year ago.
Business confidence is now highest in Western Australia at 107.1, although down 23.1pts (-17.7 per cent) from a year ago. Western Australia and NSW are now the only states with business confidence in positive territory above the neutral level of 100.
Property & business services, community services and education & training are the most confident industries in the last two months.
These two industries are among nine with business confidence higher than the neutral level of 100 in June–July 2022 although all 18 industries measured had a lower rating now compared to a year ago.
Other industries with business confidence over 10pts higher than the national average include education & training on 113.2, but down 15.3pts (-11.9 per cent) on a year ago, mining on 109.6, down 2.9pts (-2.6 per cent) on a year ago and administration & support services on 107.3, down 14.7pts (-12.0 –) on a year ago.
Two industries that have very low business confidence in June–July 2022 are finance & insurance on only 67.7, down a large 43.3pts (-39 per cent) on a year ago, and retail on only 64.9, down a massive 62.2pts (-48.9 per cent) on the same time a year ago. Both industries are now a massive 30 per cent below the national average.
Other industries with far lower-than-average business confidence include electricity, gas & water on 89.6, down 16.4pts (-15.5 per cent) on a year ago, manufacturing on 87.0, down 11.2pts (-11.4 per cent) on a year ago and construction on just 80.1, following a large drop of 47.7pts (-37.3 per cent) on a year ago.
The weakness in business confidence clearly related closely to the high inflation and increasing interest rates the Australian economy is currently dealing with. The recent ABS CPI figure for the year to June 2022 was reported at 6.1 per cent – the highest annual rate for over 20 years since 2001.
The low reading for the retail industry showed as inflation and interest rates rise customers will firstly cut back on their discretionary expenditure while non-discretionary expenditure on essentials such as food and drinks continues. The latest ABS Retail Sales figures just released for the month of June showed that although the annual rate of growth was high at 12 per cent, the month-on-month increase was only 0.2 per cent.