(Australian Associated Press)
Consumer confidence has dropped unexpectedly, amid households’ concerns about their finances, despite strong economic growth in the fourth quarter of 2016.
The ANZ-Roy Morgan Australian Consumer Confidence Survey shows that sentiment dropped 4.4 per cent to 113.9 in the week to March 5, but remains above the 100-point level separating confidence and pessimism.
ANZ’s head of Australian economics David Plank said consumer confidence had failed to hold on to the previous week’s 4.7 per cent gain, despite a 1.1 per cent rise in gross domestic product in the final three months of 2016.
“While consumer sentiment remains above its long-run average, the uptrend has clearly lost momentum in a period of unusually high volatility in survey responses,” Mr Plank said in a statement on Tuesday.
The ongoing weakness in wage growth has likely weighed on consumers’ perception of their finances, with the GDP report last week showing growth in wages remained lacklustre in 2016’s final quarter, he said.
Mr Plank said last week’s Organisation for Economic Co-operation and Development report indicating that rising house prices are a threat to the economy may also have “unnerved households”.
Households’ views of their current finances dropped 8.6 per cent and sentiment toward their future finances fell 6.2 per cent.
Still, ANZ believes consumer confidence is likely to remain resilient down the track, supported by solid economic fundamentals and an accommodative monetary policy stance.