Consumer confidence down due to COVID-19

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Renewed fears of a second national foreclosure have brought down consumer confidence, fueling fears that Australia’s economic recovery will be stifled.

The latest research by ANZ and Roy Morgan shows that confidence has dropped 0.5% in the past week – its third weekly decline.

Her report notes that worsening conditions in Melbourne are causing anxiety, as economic sentiment conditions fell 3.4% during the week.

ANZ Australian chief economist David Plank said government support measures “mainly” protect people from the brunt of the financial recession.

“In contrast, sentiment towards personal finances is almost unchanged, highlighting the role that the massive fiscal stimulus has played in protecting people from the direct fallout from the economic crisis triggered by the health response to the pandemic”, said Mr. Plank.

In a separate monthly survey by NAB Group Economics, economic conditions and confidence are showing signs of improvement but remain deeply negative.

NAB economic conditions increased 17 points to seven points, rebounding from historic lows recorded at the start of the pandemic.

The bank noted that improved operating conditions in the retail and mining sectors had boosted confidence.

NAB chief economist Alan Oster said the investigation was carried out before the blockages were reintroduced in Victoria, which is likely to hamper business recovery.

“The increase has been widespread across all industries, but it is important to remember that, given previous heavy falls, the conditions for falling overall remain very weak,” said Oster.

“Conditions and capacity usage remain very low and it will take some time to recover.”

Oster said job confidence in June rose 20 points to a negative index position of 11 points, but the outlook remains considerably weak.

“The improvement in the employment index is very welcome, but it is at a very low level and suggests that the labor market still has a long way to go before it can claim a full recovery”, a- he declared.

Consumer conditions and reports coincide with weekly payroll data released by the Australian Bureau of Statistics which indicates that job losses were 5.7% at the end of June.

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