The ANZ-Roy Morgan Consumer Confidence rose 0.7% to 113.7 in the week ending September 28. After volatility earlier in the year, the stabilisation in confidence over most of August and September around its long-run average is encouraging for the outlook for household spending.
Beneath the surface, there were some sizable moves in the sub-indices. Households were generally more optimistic about their current circumstances. Household perceptions about their ‘financial situation compared to a year ago’, the sub-index most closely correlated with consumer demand, rose by 3.8%. ‘Time to buy a major household item’ rebounded a strong 4.7%, after falling 1.5% the previous week.
Meanwhile, households were more concerned about the economic outlook. Expectations of economic conditions over the next year and the next five years’ fell by 1% and 6.3% respectively last week.
ANZ Chief Economist Warren Hogan commented: “ANZ-Roy Morgan Consumer Confidence has stabilised over recent weeks and remains consistent with our view that household spending will grow moderately this year. However, we will continue to monitor developments closely; the trajectory of consumer confidence remains key for the recovery in consumer spending which in turn will be supported by gains in household wealth on the one hand but constrained by subdued household income growth on the other hand.”