The headline index for consumer confidence jumped sharply last week, with views on ‘economic conditions over the next 12 months’ leading the gain.
The ANZ-Roy Morgan Australian Consumer Confidence index increased by 5.9 per cent in the week ending 8 January, reversing the decline recorded in the last survey conducted in mid-December.
According to ANZ, the headline index is now at its highest level in 15 weeks. In particular, households’ views of economic conditions over the next 12 months rose by 11.2 per cent during the week.
Meanwhile, household views of the economic outlook in the next five years rose by 2.2 per cent.
Households’ views towards their finances compared to a year ago also rose, by 3.0 per cent, its highest level since the end of September 2016 when the index reached a post-GFC high.
Commenting on the results, ANZ senior economist Jo Masters said: “Last week’s solid rebound in consumer confidence suggests an upbeat start to 2017 for households. While consumers tend to be more optimistic in January, likely due to the holiday season, it is a positive sign for the economy that households are particularly upbeat about their current financial situation.”
“This index is a reasonable indicator of consumer spending, suggesting a solid Christmas and holiday spending period is underway,” she added.
Ms Masters explained that a rebound in consumer spending is important to support economic growth, particularly as the housing construction cycle appears to be peaking.
“While weak wage growth remains an issue for household incomes, it is encouraging that households’ views on future finances are in a strong upward trend, likely supported by a solid labour market and rising house prices,” she said.
[Related: Weak GDP data hits consumer confidence]