Reflective of the skittish, headline-driven nature of the report in recent months, the latest ANZ-Roy Morgan consumer confidence survey rebounded strongly last week.
The index jumped by 4.5% to 111.8, presumably on the back of the rebound in the Chinese stock market and a positive resolution to Greek bailout negotiations during the survey period.
Having plummeted in the previous week, perceptions towards the economic outlook, both in the year ahead and out five years, jumped 10.8% and 7.1% respectively, helping to boost the headline consumer confidence gauge.
Felicity Emmett, co-head of Australian economics at ANZ, suggests that while it was positive that Chinese and Greek concerns dissipated as quickly as they began, overall confidence levels remain subdued.
“The uplift in confidence is a positive sign that recent concerns around Greece and China have not had a lasting impact on sentiment. Despite the lift, levels remain subdued and confidence is a vital ingredient missing in the economy. Non-mining businesses remain reluctant to lift investment given uncertainty about the demand outlook. As such, a sustained lift in consumer confidence is key to returning the economy to trend growth.”
The full breakdown of the surveys subindices can be found below.
- Financial situation compared to a year ago 106.0 (+0.76%)
- Financial situation next year 122.7 (+3.02%)
- Economic conditions next year 92.5 (+10.77%)
- Economic conditions next five years 104.6 (+7.06%)
- Time to buy a major household item 133.4 (+3.17%)
While a good sign that confidence levels rose strongly over the week, the Jekyll and Hyde nature of the survey is making it increasingly difficult to gauge how confidence among Australian households is tracking.
Given the weekly reading currently resembles an earthquake seismograph, perhaps it’s best to focus on the survey’s four-week trend for the moment. It’s currently sitting at 111.5, slightly below the survey’s long-run average of 112.7. Given the circumstances facing Australian households that probably sounds about right.