There’s some good economic news as Australian consumer confidence continues to grind higher, following the RBA’s surprise rate cut last month.
The ANZ Roy Morgan weekly consumer confidence index rose 0.8% last week to 112.3. That’s the third week in a row that confidence has gained and it is now 2.3% off the lows of February. The index is now just 0.4 points away, you could say a rounding error, from the 112.7 monthly average the index has posted since 1990.
The ANZ highlights that it is the view of the outlook that is driving confidence higher:
Households’ view on the economic outlook continued to rise last week. The subindex ‘economic conditions next year’ rose 1.0% following a rise in previous week. The subindex ‘economic conditions next 5 years’ rose 3.1% for the third consecutive week. These indices are now 4.6% and 4.5% higher respectively since the February rate cut.
That’s good news for spending in the months ahead.
ANZ Chief Economist Warren Hogan said it’s the “strength in the housing sector is helping consumers feel more positive about their finances.” He also believes that another rate cut from the RBA “in coming weeks should also help to support the housing market and in turn confidence.”
But he has a warning for Treasurer Hockey and the Government as they frame the Budget before its May release. “Given the fragility of consumer confidence, the upcoming Federal Budget in May will be a key test of household sentiment,” Hogan said.