Consumer confidence recovers

Excluding household items.

The ANZ-Roy Morgan Australian Consumer Confidence index recovered 2%, regaining a third of last week’s sharp fall. Four of the five sub-indices were positive with the exception ‘the time to buy household item’ sub-index, which fell 2.5%.

The rise in consumer confidence was welcomed by ANZ’s head of Australian Economics, David Plank, who said it offered some respite in the confidence index after the 6% fall the previous week, taking the headline index back above its long-run average.

“Given the weakness in equity markets during the week, which saw the ASX 200 index fall more than 10% from its recent peak, the bounce in confidence was encouraging even if it was modest in the context of the prior week’s fall. The weekly read on inflation expectations more than reversed last week’s jump, suggesting that fears about rising petrol prices have subsided somewhat.

“The ‘time to buy a household item’ was the only confidence sub-index registering negative growth, falling to its lowest level since May 2014. The weakness of this category is not surprising given the state of the housing market. There are a number of data releases this week that could impact sentiment, not least the Q3 CPI. The performance of equity markets may also drive sentiment,” Plank said.

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