Political instability in the wake of a deadlocked federal election has given Australians the jitters.
The ANZ-Roy Morgan consumer confidence index edged down 0.9 per cent last week, with levels slipping in the past fortnight after reaching a two and a half year high.
ANZ head of Australian economics Felicity Emmett says uncertainty following Saturday’s cliffhanger election and concerns over the global outlook dragged sentiment down.
“Over the coming weeks, confidence could be affected if the government fails to secure a majority and a minority government proves difficult to form,” she said.
“This uncertainty around the political outlook will likely remain a key influence on household confidence in the near term.”
While consumers’ views towards their future finances dipped 5.1 per cent, overall levels remain well above the long-run average.
And there was a bounce in views about the economic outlook following sharp losses the previous week.
Australia’s services sector has ended the financial year on a positive note by expanding for a second month despite the political uncertainty.
The Australian Industry Group’s Performance of Services Index (PSI) fell 0.2 points to 51.3 in June.
A number above 50 indicates the sector is growing, but the lower number shows the expansion was at a slower pace.
“While the election outcome remains uncertain, it is clear that more widespread growth across the sector is needed to put the rebalancing of the economy on a firmer footing,” Ai Group chief executive Innes Willox said.
As vote counting resumes after Saturday’s knife-edge election, global ratings agencies have warned that Australia’s prized AAA credit rating could be at risk if political paralysis damages the government’s capacity to manage budget deficits.
THe PSI survey showed that sales, employment and new orders all lifted in the month.
Willox said the gains were concentrated in the retail and finance and insurance sub-sectors, with the remainder of the industry either treading water or shrinking.
AAP
Access exclusive analysis, locked news and reports with Inside Retail Weekly. Subscribe today and get our premium print publication delivered to your door every week.
