Australian consumer confidence ticks higher on improved economic outlook

Consumer confidence in Australia during the week ended July 24 ticked higher, following improved optimism over the country’s economic outlook in the near and long term. Moreover, lower financial market volatility and buoyant equity markets are likely to have remained the major factors behind last week’s improvement.

The ANZ-Roy Morgan Australian Consumer Confidence edged 0.6 points higher this week, rising 0.5 percent to 115.5. Consumers’ views on the 12-month economic outlook rose by 1.5 percent last week, while views on the economic outlook over the next 5 years rose 1.0 percent.

In contrast, household views on their finances deteriorated last week. Consumers’ views on their current finances dropped 2.0 percent last week, while views towards future finances fell 1.1 percent. The indicator of current finances has declined by 5.3 percent over the past five weeks, suggesting that heightened uncertainty and possibly the slowdown in employment growth have weighed on household sentiment.

"As consumers’ views on their finances tend to be a good predictor of spending, this weakening (if it continues) could pose some downside risk for consumer spending going forward," said Felicity Emmett, Head, Australian Economics, ANZ.

Meanwhile, consumers’ views on whether 'now is a good time to buy a major household item' rose a solid 3.0 percent last week, partially offsetting the fall over the past five weeks.