This Chart Shows Australian Household Wealth Rebounding

This chart from a report by HSBC economist Paul Bloxham shows the growth of household wealth in Australia, which had dropped significantly in 2011/12.

According to Bloxham’s report out this morning: “Households have been rebuilding wealth via higher saving in recent years, so consumer balance sheets have improved.”

“After a number of years of apparent cautiousness, Australia’s consumer sector may be ripe for a revival.”

Here’s what it means:

  • Low rates, rising household wealth and a housing construction upturn are expected to support a pick-up in household consumption
  • HSBC expects that the drag from household balance sheet consolidation and rising household saving may be behind us
  • Given the low level of household consumption as a share of GDP, there may be room for it to increase

This chart shows that consumption as a share of the economy has been quite low:

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