The latest ANZ and Roy Morgan research has reported a rise of 1.3 per cent in the consumer confidence index, from 119.4 to 120.9.
The research has revealed that consumers are more optimistic about current and future economic conditions, with the index jumping by 4.0 per cent and 4.2 per cent, respectively.
Consumer confidence in future economic conditions were at their highest point since 2013.
Confidence in current financial conditions continued to drop, however, falling by 1.6 per cent to 103, while confidence in future financial conditions rose by 0.5 per cent to 126.8.
Consumer sentiment regarding the “time to buy a household item” fell for the second consecutive week, dropping by 0.4 per cent to 141.3.
“[The] fact that Sydney’s planned rail strike was averted by court action may have helped boost overall sentiment a little,” ANZ’s head of Australian economics, David Plank, said.
“A jump in petrol prices in Melbourne and Sydney may have played a part in dampening households’ views towards current financial conditions.
“Encouragingly, consumer confidence has sustained the bulk of its January gains, potentially setting up 2018 for a solid start in terms of consumer spending.”
Mr Plank expects next week’s figures, along with the quarterly update, to be “solid” as a result of increased retail spending in the latter months of 2017. But he also predicts lower than average December figures.
“Next week, we’ll find out how December retail sales went, along with the fourth quarter as whole,” the ANZ head added.
“The strength of retail sales in October and November, especially, means that the quarterly result will almost certainly be quite solid after the weak Q3 result.
“We would not be surprised to see December month retail sales post a small decline after the very strong result for November, however.”