The year is ending with plunging confidence, which is broadly through the community.
The Westpac McDermott Miller survey indicates consumer confidence has fallen sharply heading into the holiday season, dropping to its lowest level on record. (Update: The ANZ-Roy Morgan survey is now out and also records a record low in consumer sentiment. The chart below is now updated with their result too.)
They say mounting financial pressures are the major concern that is worrying households. Living costs have been skyrocketing. We’ve also seen sharp increases in borrowing costs.
The weakness in consumer confidence is weighing on household spending appetites, reinforcing expectations for a slowdown in overall economic growth.
A striking feature of this quarter’s survey is how widespread the drop in confidence has been. Confidence has now fallen to low levels across all age groups and income brackets. That highlights just how widespread the headwinds buffeting the economy are. Every household across the country is feeling the pinch from the large increases in the cost of living. And for those households with mortgages, those financial pressures are likely to be even more of a worry.
We are awaiting the similar ANZ-Roy Morgan consumer confidence survey due Wednesday. (Now updated). That one has been signaling a downside recently, but their November levels weren't all-time lows like today's Westpac one.
Separately, farmers are being squeezed by rising interest rates, with debt or other financial concerns eroding mental wellbeing, the latest Federated Farmers Banking Survey shows.
Farmer satisfaction with their bank relationship continues to slip. Although just on 60% of farmers said they were very satisfied or satisfied with their bank relationship, this was down 5 points from the survey six months earlier, and is the lowest since the biannual surveys began in 2015.
Tomorrow's business sentiment survey from ANZ isn't likely to show any uptick either. (Update: It didn't. see this.)