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CONSUMER confidence has sharply declined by eight per cent in the last two weeks, linked to Federal budget policy leaks according to the ANZ.
The ANZ-Roy Morgan weekly report shows a 4.2 per cent drop last week, coinciding with the Commission of Audit’s report and speculation around the deficit reduction levy.
“The policies of most concern to the consumer spending outlook at this stage are the mooted temporary deficit reduction levy and the proposed changes to the eligibilities for welfare and pension payments.
In line with the results, consumer’s perceptions of economic conditions next year dipped more than 20 per cent in the past fortnight.
Colhoun says the consumer spending outlook remains promising this year, with the budget outcome affecting the speed of the recovery.
Sales are down from 4.8 per cent in the previous quarter following a strong Christmas period, while the lateness of Easter this year contributed to the decline.
“Some pockets of the economy are taking a wait and see approach and this could lead to confidence weakening further and risks to consumer spending.
Retail sales accounted for all of the slowing, particularly in food sales, whereas construction led the charge rising by 11.5 per cent.
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