By Patrick Avenell
SYDNEY, NSW: Australia’s leading consumer sentiment index has described the nation’s buying motivation as “resilient”, which is encouraging news heading into the last week before Christmas.
The Westpac-MI consumer sentiment report for December 2010, which was the first monthly report after the Melbourne Cup Day interest rate rises, suggests that Christmas may indeed still come for Australian retailers.
“Sentiment continues to hold its ground after a surprisingly resilient reaction to November’s interest rate hikes,” said Westpac senior economist Matthew Hassan. “While off the highs recorded in October and the first few months of the year, the Index remains in solidly optimistic territory comfortably above its long run average.”
Much of the murmurs throughout the consumer electronics industry have indicated a soft Christmas, with both retailers and suppliers not meeting targets. This news provides some hope that these forewarnings of doom have been premature.
“The fact that sentiment managed to post a slight rise in December suggests any lingering concerns from November’s rate rise have mostly faded.
“Consumers would have found some comfort on rates from with the RBA’s decision to leave the official cash rate on hold at its December meeting and indications that the Bank is likely to leave policy on hold for some time.”