Despite overcoming the threat of the Omicron wave, economic recovery has never felt so far away – at least for a quarter of Australians.
The latest index from ANZ-Roy Morgan revealed that consumer confidence fell 2.6 points in the last week of February, with Queensland taking the most hits with a 10.9% decline.
Queensland was followed by Western Australia, dropping five points to 97.4% when the state breached thousands of COVID-19 cases over that week. However, consumer confidence edged up 0.7% in New South Wales and 3.6% in South Australia.
Only 14% of Australians are expecting a positive outcome for the economy over the next 12 months compared to the 25% who are in anticipation of a negative outcome, according to Roy Morgan.
Aside from the east coast flooding, David Plank, head of Australian economics, said confidence also dropped due to a spike in COVID-19 cases in West Australia and the rising geopolitical tensions. However, it is noted in the report that two-thirds of the interviews were conducted prior to the Russia-Ukraine crisis.
“The fact Queensland and West Australia fell the most suggests local factors were key,” Plank said. “Household inflation expectation surged to a new seven-year high at 5.3% as retail petrol prices continued to climb higher.”
As for the impact of flooding on property values, it is still too early to say. Eliza Owen, head of research at CoreLogic, believes there ought to be proper clean-up and damage assessment before anyone can determine the cost and implications of the natural disaster.
“Additionally, the operational environment is very different, with monetary policy more likely to tighten in the next 12 months,” Owen said. “Ultimately, this event reinforces the consequences of climate change, which poses a great challenge to the real estate and finance sectors now and in the future.”
