Chief Economist CreditorWatch Economics News Retail sales
2 mins read

Consumer confidence continues to slide as cost of living pressures bite

The Westpac-Melbourne Institute’s Consumer Sentiment survey revealed a fall in consumer confidence at the April survey of 2.4 per cent. Consumer confidence has now been near record lows for two years, representing one of the longest lengths of time of consumer despondency since the survey began.

What should be of concern to retailers is the slump in the ‘time to buy a major item’ index, which was down 6.6 per cent month on month, and is now at record lows.

NAB’s Monthly Business Confidence survey showed a slight improvement in confidence, and a slight decrease in business conditions. On balance, however, businesses reported fairly steady conditions. Capacity utilisation – a very good leading indicator of employment conditions – continued to slowly ease downwards.

It would appear that businesses that either directly sell or supply the discretionary retail and food and beverage sectors will continue to experience very tough trading conditions as the year progresses. It is unlikely that consumers will feel any genuine financial relief until two or three drops to the cash rate, and it looks increasingly like we won’t reach that stage in Australia until early 2024. In better news, businesses are not nearly as pessimistic as consumers, driven by those non-retail businesses that have not experienced such an extreme fall in demand.

CreditorWatch notes that external administrations are already well above pre-pandemic levels, and are forecast to increase as consumer conditions remain very challenging and impacts continue to flow through the business community.

Chief Economist construction economic insight economist economy food and beverage Mining NAB NAB Business Confidence news retail retail trade Westpac Westpac Consumer Sentiment
Anneke Thompson
Chief Economist, CreditorWatch
Anneke joined CreditorWatch as Chief Economist in April 2022. She is a specialist researcher and commentator on issues impacting the credit industry, SMEs and the broader economy, conducting regular presentations to corporate groups. She is also a media spokesperson for CreditorWatch, regularly appearing on national television and in syndicated media. Anneke is also the Managing Director of Clio Research and formerly the National Director and National Head of Research at Colliers International Australia. She has also worked at NAB and Jones Lang LaSalle.
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