Consumer confidence overall has been very resilient to the lockdowns seen in NSW, VIC and the ACT.
Despite an extended lockdown period for much of the country, consumer confidence had begun to increase according to ANZ-Roy Morgan, amidst revealed plans in NSW to reopen.
With consumer sentiment lifting and business confidence in yesterday’s NAB Business Survey also resilient, it is likely economic activity will rebound sharply once restrictions ease.
ANZ-Roy Morgan Consumer Confidence increased by 3.1pts to 103.1 this week after the NSW Government outlined its plans for re-opening Sydney in mid-October when over 70% of residents are set to be fully vaccinated compared to 46% today.
Consumer Confidence remains well below the 2021 weekly average of 108.7 but is now 10.7 points higher than the same week a year ago, September 12/13, 2020 (92.4).
Consumer Confidence was up this week in both NSW and Victoria and into positive territory in both States.
The biggest increase was in Sydney which increased 10.3pts (+10.6%) to 107.1 while Consumer Confidence also jumped in Melbourne, up 6.4pts (+6.6%) to 103.6.
Driving this week’s increase was improving confidence about the year ahead with more people expecting to be better off financially this time next year and positive views about the Australian economy.
- Consumer confidence jumped 3.1% last week, as the NSW government released its much anticipated “roadmap to freedom”, which sets out the plan for easing of restrictions once 70% of adults in the state have been fully vaccinated.
- Four out of the five subindices made significant gains. ‘Current financial conditions’ rose 2.0%, while ‘Future financial conditions’ were up 3.7%.
- ‘Current economic conditions’ improved 6.8%, while ‘Future economic conditions’ softened 0.6%.
- ‘Time to buy a major household item’ gained 4.2%. ‘Weekly inflation
expectations’ dropped 0.2ppt but remained quite elevated at 4.5%. It's four-week moving also remained at 4.5%.
ANZ Head of Australian Economics, David Plank, commented:
"Consumer confidence gained 3.1% last week, driven by a huge jump of 10.6% in Sydney as the NSW government released its roadmap out of lockdown. With close to 47% of NSW’s adult population already fully vaccinated, this roadmap is expected to take effect by mid-October. That is, once the number reaches 70%.
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Confidence increased by 6.2% in Victoria, while it fell 3.2% in Queensland as new cases emerged in the state last week. Household inflation expectations have been quite volatile in the past few weeks, rising sharply then dropping back.
Our research indicates that expectations tend to follow developments in petrol prices and the headline CPI.
With these appearing to have peaked, we may be at a level where expectations stabilise."