The ANZ – Roy Morgan Weekly Consumer Confidence Index has been bouncing around the long run average recently but the 1.1% rise this week to 113.8 and the drivers of the rise suggest that, even though the economy doesn’t exactly excite at the moment, consumers may be adjusting to the headline news by looking at their personal situation.
Indeed the rise of 1.1% was driven by “perceptions of households’ financial situation compared to a year ago (+3.8%) and expectations over the next year (+3.3%),” ANZ said.
The key is that even with recent volatility in these measures they are in a solid uptrend suggesting consumption and spending should be relatively healthy in the months ahead.
ANZ Chief Economist Warren Hogan said that “Concerns about the economic outlook continue to weigh on consumer confidence and are likely contributing to cautious consumer behaviour and the elevated household saving rate. Nonetheless, we expect that the ‘wealth effect’ from higher house prices still has further to run and will allow households to reduce their savings modestly. This will provide some offset to soft household income growth over coming quarters.”
No doubt a falling stock market will impact confidence if it accelerates internationally but while Australians focus on their finances the outlook remains positive, it seems, based on this data.