The more buoyant mood of Australians as coronavirus numbers and restrictions ease suggests the nation is preparing for a “normal” Christmas.
The Westpac-Melbourne Institute consumer sentiment index rose further in November to a seven-year high as optimists again held the upper hand.
The index rose 2.5 per cent in November to 107.7, building on the 11.9 per cent spike in the previous month, and is now 13 per cent above the average over the six months before the economy-wide shutdown in March.
“This is another strong result,” Westpac chief economists Bill Evans said.
“The most important developments since last month have been the significant unwinding of restrictions across Victoria and the reopening of the Victoria-NSW border.”
The Reserve Bank also made modest cuts to interest rates during the November 2-6 survey period, while reiterating a commitment to keep rates at record lows for at least three years.
Every November, survey respondents are asked whether they plan to spend more or less on Christmas than the previous year.
For 2020, 11.5 per cent expected to spend more while 32.3 per cent expected to spend less.
However, the net balance of minus 20.8 per cent is around the long run average since the question was first posed in 2009.
“Given the high degree of uncertainty this Christmas and the headwinds from the high unemployment rate, it is very encouraging sign that Australians are planning for a ‘normal’ Christmas,” Mr Evans said.
Other gauges of confidence released this week also indicated the country has got over the worst of the pandemic, prompting Prime Minister Scott Morrison to declare the economic comeback from recession has begun.
The weekly ANZ-Roy Morgan consumer confidence index has now risen for 10 weeks in a row, while National Australia Bank’s business confidence index is at its highest since mid-2019.