The ANZ-Roy Morgan consumer confidence index rose by 3.6 points to 116.8 in the week ended 5 June 2016, and continues to track above the long-run average of 112.8 (see next chart).
It was the strongest reading since 12 January 2014.
The key drivers of the increase in confidence were the sub-indices measuring family finances (up 3 points), economic conditions over the next 12 months (up 6 points) and next 5 years (up 4 points), as well as whether it was a good time to buy a major household item (up 4 points).
According to Felicity Emmett, head of Australian economics:
“The improvement in views around household finances is encouraging for the outlook for consumer spending”…
“It has occurred alongside an improvement in the housing market, with prices and auction clearance rates showing an improvement over recent months. This, in turn, will help to further support confidence and spending”…
“Going forward, we expect that confidence will remain sensitive to developments in the domestic economic data, as well as the evolution of the political debate in the lead-up to the July election”…
The below chart, which plots the most recent Westpac-Melbourne Institute Consumer Sentiment index against the latest ANZ-RM Consumer Confidence index, shows both indices displaying optimism and tracking each other fairly closely:
