Australian consumer confidence has surged after a sharp rebound in views about the future

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Australian consumer confidence has rebounded from last week’s dip, rising a solid 2.5% in the week ending August 14, according to the latest ANZ-Roy Morgan weekly consumer confidence survey.

That takes the index 4.3% above the long-run average. The ANZ said the surge in confidence was driven by an incredible 9.6% bounce in consumer views of the economic outlook in the year ahead, with the 5-year horizon also showing a solid rise of 4.6% over the week.

ANZ’s head of Australian economics, Felicity Emmett, said that despite recent volatility “last week’s rebound in confidence was underpinned by a strong bounce in the economic outlook subindices”.

Emmett highlighted five reasons the ANZ believes confidence is elevated.

Australians’ perceptions of the economic outlook have likely been supported by a combination of factors:
• the strength in the housing market (with strong auction clearance rates, especially in Sydney and Melbourne);
• relatively resilient business sentiment;
• low interest rates (especially with the RBA’s decision to cut the cash rate two weeks ago); and
• ongoing strong performance in equity markets.

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