ANZ-Roy Morgan Consumer Confidence up 1.9pts to 111.2 as Australians become more confident about their personal finances

ANZ-Roy Morgan Consumer Confidence increased 1.9pts to 111.2 on December 12/13, 2020 and is now 15.4pts above the 2020 weekly average of 95.8 and 3.2pts higher than a year ago on the comparable weekend of December 14/15, 2019 (108.0). This is the highest Consumer Confidence has been for over a year since Melbourne Cup weekend in 2019 (113.5).

This week’s increase in Consumer Confidence was driven by increasing confidence about personal financial situations both compared to a year ago and also looking ahead over the next year.

Current financial conditions

• Now 27% (up 3ppts) of Australians say their families are ‘better off’ financially than this time last year and 28% (down 3ppts), say their families are ‘worse off’ financially (the lowest figure for this indicator for nine months since March 14/15, 2020).

Future financial conditions

• In addition, 41% (up 3ppts) of Australians expect their family to be ‘better off’ financially this time next year (the highest figure for this indicator for 10 months since February 15/16, 2020) compared to 15% (up 2ppts) that expect to be ‘worse off’ financially.

Current economic conditions

• Nearly one-in-five Australians 19% (up 2ppts) expect ‘good times’ for the Australian economy over the next 12 months (the highest figure for this indicator for 9 months since March 2020) while 20% (down 1ppt), expect ‘bad times’ (the lowest figure for this indicator for over a decade since November 2010).

Future economic conditions

• In the longer term, over a quarter of Australians, 26% (down 1ppt), are expecting ‘good times’ for the economy over the next five years compared to only 12% (down 1ppt) expecting ‘bad times’.

Time to buy a major household item

• In good news for retailers in the lead-up to Christmas a clear plurality of Australians, 43% (unchanged), say now is a ‘good time to buy’ major household items (the equal highest figure for this indicator for ten months since February 8/9, 2020), while only 25% (unchanged), say now is a ‘bad time to buy’ (the equal lowest figure for this indicator for nine months).

“It was yet another upbeat result in the latest survey, with consumer confidence reaching new 2020 highs. Most subindices are now back at or even higher than the pre-pandemic level, with the confidence in future economic conditions at an 18-month high. The exception is current financial conditions, for which sentiment is close to 10% lower than mid-March and still below the neutral level of 100 (if only just). Despite this exception, the rise in confidence bodes well for the holiday season. Last week we noted the sharp jump in inflation expectations. These have pulled back a bit in this week’s survey but are still elevated enough to push the 4- week moving average to its highest level since late April. This is still some way below the 4% plus level for expected inflation that was typical prior to the pandemic.”