Australia’s consumer sentiment fell in the week the Reserve Bank (RBA) cut the official cash rate by 25 basis points to 3.85%.
According to the latest ANZ-Roy Morgan survey, consumer confidence declined 1.8 points to 87, underlining ongoing economic unease despite the central bank’s attempt to stimulate growth.
The index is still 6.8 points higher than the same week last year and sits just above the 2025 weekly average of 86.5. But the dip signals Australians remain wary about near-term financial stability.
“ANZ-Roy Morgan Australian Consumer Confidence fell 1.8pts last week to 87.0pts. There was a broad-based fall across the subindices despite the RBA’s 25bp rate cut last week,” said ANZ economist Sophia Angala (pictured).
The week’s analysis by state showed consumer confidence fell in New South Wales, Victoria, Queensland and South Australia, while Western Australia bucked the trend with a slight uptick.
Consumer confidence by housing status revealed a stark contrast. Homeowners drove the overall decline, with their sentiment falling 4.8 points to 85.7. This follows similar declines during earlier rate moves this year, ANZ-Roy Morgan data showed.
In contrast, those paying off a mortgage reported a 2.3-point increase to 89.7 – not enough to lift the broader index.
Australians are also increasingly pessimistic about their personal and national economic outlooks.
Only 18% say their families are “better off” than a year ago, while 42% feel “worse off”. Looking ahead, 28% expect to be “better off” next year, down two points, while 30% foresee being “worse off”, unchanged from the previous week.
Confidence in the economy over the next 12 months plunged, with just 13% anticipating “good times” and 29% expecting “bad times” – a five-point increase in negativity.
Longer-term sentiment also declined, with only 13% forecasting positive economic conditions over five years, compared to 24% who foresee ongoing “bad times”.
Despite overall gloom, net buying intentions improved for the third consecutive week.
Some 23% of Australians believe now is a good time to buy major household items, unchanged from last week, while 35% believe it’s a bad time – the lowest this indicator has been since March 2022.
“This may have been influenced by the RBA’s post-meeting commentary being more dovish than anticipated and the weaker outlook for growth, employment and inflation it expects from global trade uncertainty,” Angala said.
“We continue to expect progress to be made in negotiations between the US and its trading partners. This combined with Australia’s expected resilience, particularly with regards to the labour market, will likely lead to a relatively shallow easing cycle. We expect a 25bp rate cut in August and another in Q1 2026.”
While sentiment across the broader economy remains fragile, other indicators such as the Westpac-Melbourne Institute Consumer Sentiment Index (up 2.2% to 92.1 in May) suggest a cautious uptick in confidence. Similarly, business confidence rose slightly, with NAB’s index lifting to -1 in April from -3 in March.
