A further rise in consumer confidence has disguised the weakness in the nation’s two major cities, with Melburnians especially unhappy about a drawn-out coronavirus lockdown.
The ANZ-Roy Morgan consumer confidence index – a pointer to future household spending – rose 1.4 per cent last week to 92.4 points, a second consecutive increase.
However, confidence was weaker in Melbourne, dropping more than five per cent from the previous week.
“This suggests the announcement of the long path out of lockdown restrictions negatively impacted sentiment,” ANZ head of Australian economics David Plank said on Tuesday.
Confidence was also down in Sydney, falling more than three per cent from the previous week.
But confidence was higher across regional Victoria, where the index rose above 100 points suggesting there are more optimists than pessimists.
The survey’s sub-index, on “time to buy a major household item”, rose above the 100-point neutral level for the first time since the end of June.
“As discussions pick up around the October (federal) budget, we will be watching for signs that talk about tax cuts and job creation measures may impact consumer confidence,” Mr Plank said.
Treasurer Josh Frydenberg will hand down the budget on October 6, after it was delayed from its traditional May release because of the pandemic.
The Reserve Bank of Australia will release on Tuesday the minutes of its September 1 board meeting, when it kept the cash rate at a record low of 0.25 per cent.
Analysts will be looking at the minutes for hints on possible future policy changes.