ANZ-Roy Morgan Australian Consumer Confidence starts 2018 on a bright note with the headline index climbing 4.7% from mid-December to 122, the highest since November 2013. All the sub components showed significant increases.
Consumers remained optimistic about financial conditions, which rose to the highest since early 2017. Both current and future financial conditions registered gains, rising 5.8% and 4.2% from last reported respectively.
Economic prospects were also perceived to be much better. Current economic conditions rose 5.2% from last reported to 113.7, the highest since September 2013, while future economic conditions increased by 4.2% to 115.2.
Sentiment around the ‘time to buy a household item’ offset the 1.2% fall in December to increase by 4.4%. Inflation expectations remained stable at 4.5% in four week moving average terms despite higher petrol prices.
ANZ’S HEAD OF AUSTRALIAN ECONOMICS, DAVID PLANK, COMMENTED:
“ANZ-Roy Morgan Australian Consumer Confidence starts the year on a high as the festive mood carries on to 2018. Continued strength in the labour market, and a strong performance in the Ashes series likely helped sustain the cheer among consumers.
It needs to be acknowledged that consumer confidence usually rises in the first reading for January. Still, the increase this year is stronger than the 3.6% average lift in confidence for the past nine ‘annual turns’, indicating that the gain in confidence is more than just seasonal. Confidence has been trending higher since the low for 2017 in late August.
It is encouraging that consumers seemed willing to overlook their high debt burden, moderating house price gains and the impact of higher petrol prices. We think the continued strong growth in employment is the key driver. We’ll find out in February (with the next wages data) whether a pick-up in wage growth has also contributed to the gain in sentiment.”