Australian consumer confidence rose last week, with a timely boost from the long-awaited return of summer cricket.
The ANZ-Roy Morgan consumer confidence index rose by 0.7% to 115.8, partially offsetting the previous week’s 1.2% fall.
Four of the five sub-indexes rose, with households feeling more upbeat about both their finances and the broader economy.
2017 has been a difficult year for Australian consumers, as households struggle amid high household debt and low wage growth.
Westpac’s monthly reading of consumer confidence dipped back into negative territory in November, with pessimists outnumbering optimists.
But at a reading of 115.8, ANZ’s weekly confidence measure remains comfortably above its long-term average of 112.9.
And according to ANZ’s Head of Australian Economics David Plank, last week’s reading got a boost from Steve Smith and his band of cricket cohorts in the baggy green.
“A terrific comeback by Australia to win the first test of the Ashes certainly didn’t hurt the mood,” Plank said.
“Consumers remain quite upbeat, with a small but broad based improvement in confidence last week.”
Encouragingly, households’ views toward their finances over the next 12 months rose for the first time in over a month last week, climbing by 1.7%.
Views towards future finances — looking ahead over the next five years — also continued to improve, rising by 0.5% and a 1.6% gain in the week prior.
And sentiment towards the broader economy was also positive, as views towards current and future economic conditions rose by 1.7% and 0.5% respectively.
“In four week moving average terms, views towards current economic conditions are at their highest point since late 2013,” ANZ said.
However, Plank sounded a warning about the upcoming Christmas sales period for Australia’s struggling retail sector.
“While the recent pickup in headline confidence is encouraging, the ‘time to buy a household item’ subindex has slipped back under its long term average – not a good sign for the Christmas season sales,” Plank said.
“This is not surprising given the number of headwinds consumers face; among other things, higher electricity costs and rising petrol prices.”
Inflation expectations among Australian consumers remain steady at 4.5%, up sligthly from 4.2% in June, which Plank said could mostly be attributed to rising petrol costs rather than broad-based price increases.
“The deluge of data this week, including the Q3 GDP release, may set the tone for confidence in the near term,” he concluded.
Key data this week starts today with the release of October retail sales at 11:30am AEDT, followed by the RBA’s December interest rate announcement at 2:30pm AEDT.
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