Optimism on uptrend to new high.
Consumer sentiment towards future economic conditions has risen to its highest level since late 2013. The ANZ-Roy Morgan consumer confidence index, showed consumers grew more optimistic about both current and future economic conditions with the indices rising 4.0% and 4.2% respectively , reversing losses from last week indicators. However, sentiment around the ‘time to buy a household item’ was less positive which saw its second consecutive weekly fall, slipping 0.4%, as the four week moving average inflation expectations edged down to 4.4%.
Views towards financial conditions were mixed, with the current sub-index extending its losses from last week, falling a further 1.6%, while future finances rose slightly by 0.5% after two consecutive weekly falls.
ANZ’s head of Australian economics David Plank said while there was little domestic news of note last week the fact that Sydney’s planned rail strike was averted by court action may have helped boost overall sentiment. However, he said a jump in petrol prices in Melbourne and Sydney may have played a part in dampening households’ views towards current financial conditions.
What was encouraging was that ANZ-Roy Morgan Consumer Confidence has sustained the bulk of its January gains, potentially setting up 2018 for a solid start in terms of consumer spending, he said.
“Next week, we’ll find out how December retail sales went, along with the fourth quarter as whole. The strength of retail sales in October and November means that the quarterly result will almost certainly be quite solid after the weak Q3 result. We would not be surprised to see December month retail sales post a small decline after the very strong result for November,” Plank said.