For ‘time to buy’ household item.

The ANZ-Roy Morgan Australian Consumer Confidence index firmed 1.0% last week, on the back of a 2.1% bounce in the prior week, primarily driven by a sharp rise in the ‘time to buy a household item’ sub-index. The ‘time to buy a household item’ sub-index posted a sharp 5.2% rise last week, ending a streak of weekly declines while the four-week moving average inflation expectations were unchanged at 4.3%.

Households’ perception of current financial conditions also improved 0.5%, adding to a 1.2% bounce in the previous week. Similarly, sentiment towards future financial conditions edged up 0.2% last week, following a 3.1% rise in the prior week.

ANZ Head of Australian Economics, David Plank (pictured) said encouragingly, confidence firmed for the second straight week, with four out of five sub-indices 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’ sub-index over the last two months. A sharp increase in the sub-index last week is, 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,” Plank said.

However, consumers were less optimistic about current economic conditions, with their assessment declining 2.1%, partially reversing the 2.9% rise in the previous week. Views towards future economic conditions rose 0.7% last week, on the back of a 6.1% rise the previous week, bringing the sub-index to its highest value in seven weeks.