Australian Economy

Consumer confidence back on the rise

ANZ-Roy Morgan Consumer Confidence increased 0.8pts to 81.6 this week and is now 25.8pts below the same week a year ago, November 20/21, 2021 (107.4). Consumer Confidence is now 7.6pts below the 2022 weekly average of 89.2.

Roy Morgan noted that although the wider move in Consumer Confidence was up this week, there were mixed results around the nation. The two larger states of NSW and Queensland both decreased this week, while the other three mainland states, Victoria, Western Australia and South Australia all increased.

Across the index, the two questions that drove the weekly increase related to Australia’s economic performance over the next five years and whether now is a ‘good/bad time to buy’ major household items.

The percentage of Australians saying their families are ‘better off’ than this time last year remains unchanged at 21%, while 49% (up 3ppts) that say their families are ‘worse off’ financially.

Looking forward, Roy Morgan said that nearly a third of Australians (30% – down 1ppt) expect their family to be ‘better off’ financially this time next year. In contrast, 36% (up 1ppt) of Australians expect to be ‘worse off’, with 7% (down 1ppt) expecting ‘good times’ for the Australian economy over the next twelve months.

Those who expect ‘bad times’ for the economy ahead remain unchanged at 39%.

Over the longer term, sentiment regarding the Australian economy is said to have slightly improved this week, with 14% (up 2ppts) of Australians expecting ‘good times’ for the economy over the next five years compared to 18% (down 2ppts) expecting ‘bad times’.

When it comes to buying intentions, 24% (up 2ppts) of Australians say now is a ‘good time to buy’ major household items while more than twice as many, 46% (down 4ppts), say now is a ‘bad time to buy’.

ANZ head of Australian economics David Plank said the rise is likely due to employment growth in October and a further easing in inflation expectations.

“Household inflation expectations (IE) eased to 6.3%, but this is the sixth consecutive week with IE above 6%,” Plank said. “Despite the consecutive gains, sentiment remains close to levels last seen during the early weeks of the COVID lockdowns.

“Critically, though, ANZ-observed spending data suggests that consumer spending has stayed strong, with spending momentum similar to pre-pandemic levels. The jump in whether “it is a good time to buy a major household item” may signal sentiment regarding purchases on Black Friday this week.”

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