The latest Roy Morgan survey of consumer confidence has seen another slide in sentiment.

The survey said that the weekly Roy Morgan Consumer Confidence poll fell to 87.3, down 3.4 points in a week. The survey reports:

Interviewing was conducted last weekend, October 25/26, 2008, following the week in which discussion over the Rudd Government’s decision to guarantee the nation’s bank deposits – but not mortgage linked investments, was in the front of the news.

For the first time since the early 1990s recession, a majority of Australians (54%, up 6% in a week) expect “bad times” financially for the country as a whole over the next 12 months compared to only 14% (down 1%) who expect “good times” financially over the next 12 months.

Australian families are also far more pessimistic about their family’s financial situation compared with a year ago with 42% (up 5%) saying they’re worse financially than a year ago compared to only 25% (down 2%) who say they’re better off financially.

Retailers are in for tough times with only 28% (down 2%) of Australians saying now is a “good time to buy” major household items compared to 40% (down 5%) that say now is a “bad time to buy.” Only 32% (down 2%) of Australians expect their family’s financial position in a year’s time to be better than it is now while 27% (up 3%) expect to be worse off financially in a year’s time.

Looking further ahead, just 28% (up 1%) of Australians expect Australia will have continuous good times during the next five years compared to 28% (up 2%) that expect bad times for Australia.

Pollster Garry Morgan says the latest result “follows last week’s small rise, [which was] a short term reprieve after the Rudd Government guaranteed deposits in the big four banks and increased pensions and other welfare levels from December.”

Morgan sees this week’s result as bad news for the Rudd Government and all Australians.”“The RBA,” he now argues, “must drop interest rates 1% next week and the Rudd Government must stimulate the private sector NOT the Government sector — only these initiatives can save Australia from a major recession.”

But we are nowhere near as gloomy as US consumers are.

The latest Conference Board survey of consumer confidence in that country for this month showed a record low of 38, down from the reading of 61.4 in September (which was actually increased from the first report).

That reading of 38 was the lowest level since the index was established more than 40 years ago and well below market forecasts.

The conference board said the previous all-time low in the index was set in December 1974, when consumer confidence fell to a level of 43.2.

But if conditions in markets settle for a few weeks and there’s a rate cut next week and no more bad corporate news, we could find our confidence levels picking up.

Peter Fray

Get your first 12 weeks of Crikey for $12.

Without subscribers, Crikey can’t do what it does. Fortunately, our support base is growing.

Every day, Crikey aims to bring new and challenging insights into politics, business, national affairs, media and society. We lift up the rocks that other news media largely ignore. Without your support, more of those rocks – and the secrets beneath them — will remain lodged in the dirt.

Join today and get your first 12 weeks of Crikey for just $12.


Peter Fray
Editor-in-chief of Crikey