CONSUMER CONFIDENCE: BROAD BASED CONSOLIDATION
ANZ-Roy Morgan Australian Consumer Confidence bounced 0.7% last week to 115.8, partially reversing the 1.2% fall in the previous week. The improvement was broad based, with four out of five sub-indices posting gains.
Households are more optimistic about current and future economic conditions, with the subindices up 1.7% and 0.5% respectively. In four week moving average terms, views towards current economic conditions are at their highest point since late 2013.
Encouragingly, the ‘current financial conditions’ subindex ended its four week fall, rising 1.7% last week. Views towards future financial conditions continue to improve, rising 0.5% last week following a 1.6% rise previously.
Sentiment around the ‘time to buy a household item’ was a drag on the headline number, falling 0.7% and entirely reversing the prior week’s 0.5% rise.
ANZ’S HEAD OF AUSTRALIAN ECONOMICS, DAVID PLANK, COMMENTED
“Consumers remain quite upbeat, with a small but broad based improvement in confidence last week. A terrific comeback by Australia to win the first test of the Ashes certainly didn’t hurt the mood.
While the recent pickup in headline confidence is encouraging, the ‘time to buy a household item’ subindex has slipped back under its long term average – not a good sign for the Christmas season sales. This is not surprising given the number of headwinds consumers face; among other things, higher electricity costs and rising petrol prices.
It’s interesting to see inflation expectations stable at 4.5%, up from 4.2% in June, though this likely reflects the rise in petrol prices (up 14.1% since July) rather than broad based inflationary pressures.
The deluge of data this week, including the Q3 GDP release, may set the tone for confidence in the near term.”