Australian consumer confidence has remained steady in the period after the release of the Commonwealth Budget. According to the ANZ-Roy Morgan consumer confidence index, Australians are still experiencing a boost to sentiment. The index remained flat at an elevated 113.5 points last week, which is 11 per cent higher than a year ago. Compared to one month ago, the index is 5.70 per cent higher. “Confidence now appears to be trending higher following the government’s budget,” said ANZ chief economist Warren Hogan.
The index hit a 6-month high when it jumped in the weeks following the budget announcement. Since the series began, the long run average of 112.7 points is slightly below last week’s index value. “In level terms it is hovering just above its long-term average,” said Mr. Hogan. The survey, which measures expectations for various sets of economic outlooks, gathers its information from 1000 face-to-face interviews in the public. According to ANZ, it appears that the two cash rate cuts have also contributed to the rise in consumer confidence.
Mr. Hogan warned that although the index was looking strong, it may fade if the government doesn’t continue its momentum. “The lift in confidence is unlikely to be sustained if key measures do not pass through the parliament,” he said. “More importantly, confidence amongst consumers requires job creation and a stable, or better still, falling unemployment rate.” Mr. Hogan also noted that although the housing market remains a point of strength, the ‘time to buy a major household item’ index saw the smallest gain out of all the sub-indices. The market has largely ignored the steady consumer confidence on Tuesday. The ASX is down 1.20 per cent around 1:52pm on Tuesday.
Author: Imran Valibhoy
Jun 02, 2015
Since Joining the firm in 2006, Imran has worked on a range of M&A and Capital Market transactions in the natural resources, mining as well as projects in the renewable energy sector. Prior to joining Wise-owl, Imran worked at Euroz Securities in Perth, aiding in the advisory and valuation of companies in the mining and industrial sectors in Australia. Imran has a Masters in Banking & Finance from City University's Class Business School in London and a Bacheloor degree in Commerce from UWA.