ANZ’S HEAD OF AUSTRALIAN ECONOMICS, DAVID PLANK, COMMENTED
“Encouragingly, confidence firmed for the second straight week, with four out of five subindices posting gains. We were concerned that news of a mortgage rate increase by one of the major banks might be a big blow to sentiment, but consumers appear to be taking it in their stride for the moment at least.
We have previously highlighted the weakness in the ‘time to buy a household item’ subindex over the last two months. A sharp increase in the subindex last week is, therefore, quite timely. While the headwinds to households remain, namely sluggish wage growth, falling house prices and high levels of debt, there are certainly some offsets. Income tax cuts, the new Childcare Subsidy and falls in certain utility prices should all help consumers’ wallets, providing some more resilience to the outlook for consumption this year.”
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