Roy Morgan consumer confidence breaks out

Australians are far more confident about their personal finances compared to this time last year with 34% (up 5%) saying they are ‘better off’ financially than this time last year and 23% (down 3%) saying they are ‘worse off’ financially (the lowest since December 2007).

Also a rising majority of Australians (55%, up 2%) say now is a ‘good time to buy’ major household items while just 15% (down 1%) of Australians say now is a ‘bad time to buy’.

Now 38% (unchanged) of Australians expect ‘good times’ economically over the next twelve months compared to 24% (up 1%) that expect ‘bad times’ for the Australian economy.

In addition 41% (unchanged) of Australians expect the Australian economy to have ‘good times’ over the next five years compared to 17% (up 1%) that expect ‘bad times’ for the Australian economy.

Now 44% (down 3%) of Australians expect to be ‘better off’ financially this time next year compared to just 13% (unchanged) that expect their family to be ‘worse off’ financially.

The RM figure has an excellent correlation with the monthly Westpac figure so you can expect more of the same in the official figure. So, is it the election or house prices? Decisively the latter in my view with personal financial circumstances the dominant factor not economic prospects.

Rather than working diligently to prepare Australians for a rough couple of years of grind to work through the mining imbalances, authorities appear to be doing a moderately successful job of undermining the prudent consumer.

My view is that this will only translate into a modest uplift in consumer spending in the year ahead. The last time consumer confidence was at this level, the trend in year or year growth was lower but the seasonally adjusted figure was closer to 4%:

A decent Christmas looms.