ANZ-Roy Morgan Consumer Confidence dropped 1.3 points to 85.4 last week, as geopolitical tensions between Israel and Iran rattled global markets and raised fears of broader economic instability – including the potential impact on oil prices.
Although the index remains 5.1 points higher than the same time last year (80.3), it now sits just below the 2025 weekly average of 86.2.
The dip in confidence follows weak household spending, with Australians cautiously returning to small luxuries. Westpac’s forecast for a rate cut to 2.85% by mid-2026 reflects expectations of continued economic softness and subdued demand.
Consumer confidence declined in New South Wales and Victoria, remained unchanged in Western Australia, and improved in Queensland and South Australia, highlighting a patchy national picture.
The overall drop was driven by small falls across all five sentiment indicators, with concerns about household finances over the next 12 months contributing most to the decline.
Just 20% of Australians said their family is “better off” financially than a year ago (unchanged), while 43% (up one percentage point) reported being “worse off”.
While 27% (up 2ppts) of respondents expect to be “better off” financially this time next year – rebounding from a five-year low – 34% (up 4ppts) now expect to be “worse off”, the highest level recorded for this indicator in 2025.
Views on the short-term economy dipped again, with only 11% (down 1ppt) expecting “good times” for the national economy over the next year, while 30% (unchanged) anticipate “bad times”.
Long-term economic expectations also slipped slightly, with 12% (down 1ppt) of Australians expecting “good times” over the next five years, while 25% (unchanged) foresee “bad times”.
Net buying sentiment declined as well, with just 23% (down 2ppts) of Australians saying now is a good time to buy major household items. Meanwhile, 34% (unchanged) say it’s a bad time to buy.
ANZ economist Sophia Angala (pictured) said geopolitical risks were likely weighing on consumer sentiment and expectations for inflation.
“ANZ-Roy Morgan Australian Consumer Confidence fell 1.3pts last week to 85.4pts, falling below its 2025 year-to-date average,” Angala said.
“Escalating geopolitical uncertainty may have supported the softer headline result and may also have supported the rise in ‘weekly inflation expectations’ through consumer expectations around increases in oil prices.
“Recent domestic data has been sluggish, including evidence pointing to a soft business sector following closely after the weak GDP print for Q1.”
