The ANZ-Roy Morgan Weekly Consumer Sentiment survey has become a must-watch since its release a few months back. It correctly predicted the Budget would be poorly received in the community and that confidence would suffer as a result.
Consumer sentiment and confidence is important because in a consumption and service based economy this is where the rubber hits the road for jobs and spending. That’s why this release and the monthly Westpac-MI Consumer Sentiment survey, out at 11.30am, today are so important.
This week’s ANZ survey is a little disappointing insofar that it showed sentiment was unchanged from the previous week.
But the ANZ is painting a positive picture on the data:
While confidence is down 11% since negative newsflow related to the Commonwealth Budget began at the end of April, the modest increase over the past fortnight is a tentative, positive sign that the sharp deterioration in consumer confidence is abating.
The pace of recovery and the level that confidence eventually settles at will be important factors in determining the likely impact on consumer spending.
At this stage, ANZ’s bottom line for the household consumption outlook remains that consumer spending will improve this year, although the confidence effects from the Budget may weigh on consumer spending in the near term and impact on the speed of that recovery.
For the economy and jobs sake we hope they are right.
We’ll cover the Westpac- MI Monthly Consumer sentiment later this morning.