The festive season glee has trickled through to consumers in the new year, with confidence climbing to a more than four-year-high.
The latest ANZ-Roy Morgan Consumer Confidence Index shows a 4.7 per cent rise from mid-December to 122 points – its highest since November 2013 – thanks to significant increases in all sub components.
Notably, consumers remained optimistic about financial conditions, with sentiment towards both current and future financial conditions up 5.8 per cent and 4.2 per cent, respectively.
Australia’s economic situation was also perceived in a better light, with views on current economic conditions rising 5.2 per cent to 113.7 – the highest level since September 2013 – and on future economic conditions jumping 4.2 per cent.
The time to buy a household item index bounced back from its 1.2 per cent fall in December to increase by 4.4 per cent, while inflation expectations remained steady at 4.5 per cent on a four-week moving average, despite higher petrol prices.
ANZ’s head of Australian economics David Plank said that while consumer confidence usually rises in the first reading for January, this year’s lift was more than just a festive boost.
“The increase this year is stronger than the 3.6 per cent average lift in confidence for the past nine ‘annual turns’, indicating that the gain in confidence is more than just seasonal,” Mr Plank said on Tuesday.
He added that confidence had been trending higher since the low for 2017 in late August with strong growth in employment driving the gains.
“It is encouraging that consumers seemed willing to overlook their high debt burden, moderating house price gains and the impact of higher petrol prices,” he said.
“We’ll find out in February (with the next wages data) whether a pick-up in wage growth has also contributed to the gain in sentiment.”