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Consumer confidence survey indicates ‘uncomfortable ride’ for retailers

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Consumer confidence has lifted from its record low but remains deeply pessimistic.

Close-up woman standing and holding money coin with wallet empty of money

Photo: 123RF

The ANZ-Roy Morgan consumer confidence index for April is up six-points to just over 84-points.

The number of people who felt it’s a good time to buy a major household item – a key economic indicator – is up three points, but sentiment remains grim at net 23 percent.

ANZ said the readings were a red flag for retailers – likely to be sitting on higher than average inventories.

It said it could be an “uncomfortable ride” for retailers, who have had problems in recent years with addressing demand.

ANZ senior economist Miles Workman said its hoped consumer confidence has bottomed out.

“The Omicron outbreak has been pretty bad and it is beginning to wane now, so perhaps there’s a little bit of an improvement coming off the back of that.

“At the same time you’ve got the central bank needing to get on top of very, very strong inflation.”

Consumers Price Index inflation expectations eased 0.4 points to 5.6 percent, below the 6 percent mark of recent months.

Workman said the Reserve Bank could take some positives from that.

“When households and businesses both expect inflation to be high, it tends to become quite self fulfilling because it affects wage and price setting behaviour.

“So the fact that inflation expectations did moderate a touch, I think that’s a very good sign for the Reserve Bank.

“What I would also say is current inflation is still extremely high and expectations are still very elevated overall in most surveys, not just consumer confidence, but business surveys as well. That’s still something that the Reserve Bank should be very concerned about.”

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