The ANZ-Roy Morgan Research consumer confidence index bounced back in the week ended 19 July, rebounding 4.8 points to 111.8 to be tracking just below the long-run average of around 113 points (see next chart).
The improvement was likely due to the rebound in the Chinese stock market as well as the resolution to Greek bailout negotiations, which drove sharp increases in respondents’ perceptions about the financial situation next year (+3.02%), economic conditions next year (+10.77%), economic conditions in the next five years (+7.06%), and time to buy a major household item (+3.17%).
Nevertheless, confidence levels remain subdued – a point acknowledged by Felicity Emmett, co-head of Australian economics at ANZ:
“The uplift in confidence is a positive sign that recent concerns around Greece and China have not had a lasting impact on sentiment. Despite the lift, levels remain subdued and confidence is a vital ingredient missing in the economy. Non-mining businesses remain reluctant to lift investment given uncertainty about the demand outlook. As such, a sustained lift in consumer confidence is key to returning the economy to trend growth.”
The below chart plots the most recent Westpac-Melbourne Institute Consumer Sentiment index against the latest ANZ-RM Consumer Confidence index:
Both are clearly subdued.
