CANBERRA, AAP – Consumer confidence crept higher in the past week as Sydneysiders appeared to place hope in increasing vaccination rates getting them out of a lengthy coronavirus lockdown.
The weekly ANZ-Roy Morgan consumer confidence index – a pointer to future household spending – rose 0.2 per cent in the past week.
Sentiment among Sydneysiders surprisingly rose 0.9 per cent, even as daily virus case numbers soared above 1000 for the first time in the past week.
“The overall steady outlook may reflect the increasing vaccination rates across the country and the hope that this will eventually bring lockdowns and border closures to an end,” ANZ head of Australian economics David Plank said.
Even so, confidence in Melbourne fell 1.9 per cent with the state set to extend its shutdown further, while there were also declines in Brisbane, Adelaide and Perth, which remain lockdown-free.
However, this largely stable mood may turn ugly if figures this week show the economy has slipped into a second recession in as many years.
The June quarter national accounts are due on Wednesday.
At this stage, economists’ forecasts centre on an overall 0.5 per cent growth expansion in the June quarter and ahead of an expected steep contraction in the September quarter caused by multiple lockdowns across the nation.
However, economists see risks to their June quarter predictions and could end up showing a small contraction, which will result in two consecutive negative quarters – a technical recession.
Economists will finalise their June quarter forecasts after international trade and government spending figures are released by the Australian Bureau of Statistics later on Tuesday.
Of these, economists expect net exports (exports minus imports) to detract 0.8 percentage points from economic growth.
Other more up to date data on Tuesday will show whether Australians continue to load up with debt trying to secure a house and the impact on building approvals from the federal government’s successful HomeBuilder program unwinding.
The Reserve Bank of Australia will release its monthly credit data for July.
Total credit is expected to rise by 0.5 per cent after a 0.9 per cent increase in June.
The housing component of the data will be of particular note against the backdrop of a house price boom, although so far regulators are not seeing a deterioration in lending standards.
At the same time, the ABS will issue building approvals data for July, which are expected to drop by a further hefty five per cent after falling 6.7 per cent in June.
This weak result is expected to further reflect the end of the HomeBuilder program and disruptions caused by COVID-19 lockdowns.