It’s hard to expect Australian consumer confience to rise materially in the run up to the federal budget. That’s because of all the uncertainty still around last year’s budget let alone the one being currently framed.
So it’s no surprise that the ANZ – Roy Morgan consumer confidence index for this week showed only a small 0.5% increase after last week’s 2% fall.
That leaves the index below where it was six month ago and 1.4% below the level of a year ago. Crucially, at a time when the economy desperately needs a growth engine, besides housing, confidence is still below the long run average.
ANZ Chief Economist Warren Hogan summed up the current situation perfectly:
Consumer confidence remains soft amidst ongoing concerns over the economic outlook. While rising house prices, relative low petrol prices and low interest rates may be helping consumers feel more positive about their own finances, households remain concerned with the economic outlook in an environment of low wage growth, government budgetary strains and a soft labour market.
It’s another indication that the RBA can’t do all the heavy lifting in the economy on its own. A large part of rebuilding confidence both for consumers and business is in the hands of the Government and specifically treasurer Hockey.