ANZ-Roy Morgan Australian Consumer Confidence ended the year at 116.5 with a 1.2% bounce last week. The details were positive, with all subindices except ‘time to buy a household item’ posting gains.
Sentiment towards both current and future economic conditions rose for the third straight week (2.4% and 1.1% respectively). This and other gains are indicative of the sustained turnaround in overall sentiment since the low for the year in August.
Views towards current financial conditions jumped a solid 3.6% last week, more than offsetting the 2.7% fall previously. Views towards future financial conditions improved 0.5% last week, following a 2.8% fall in the previous week. Both subindices currently sit above their long term averages.
Sentiment around the ‘time to buy a household item’ fell 1.2% last week. Inflation expectations remained stable at 4.5% in four week moving average terms.
ANZ’S HEAD OF AUSTRALIAN ECONOMICS, DAVID PLANK, COMMENTED:
“ANZ-Roy Morgan Consumer Confidence ended the year with a broad based increase, likely fuelled by last week’s bumper jobs report, another strong performance by the Australian cricket team and some good ol’ Christmas cheer.
Broadly, after a sustained decrease in the first half of 2017, confidence has recovered substantially, most recently due to an upswing in sentiment around economic conditions. Views towards overall economic conditions are now at their highest point in 2017, and within striking distance of their long term average. This likely reflects the extraordinary labour market performance through the year, and a pickup in activity over the second half.
That said, even as views towards economic conditions have bounced, confidence in financial conditions, particularly in the near term, has faltered. This reflects a number of headwinds consumers have faced in 2017, particularly persistently weak wage growth and high household debt. As such, we believe that, a pick in wage growth is the key to a further improvement in confidence over 2018.”