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Will Oz Consumer Confidence Continue To Recover? Up 1% Last Week

Australian consumer confidence has improved for the fourth week in a row, but rose by just 1% last week, according to the ANZ-Roy Morgan Consumer Confidence index.

“Confidence is showing signs of consolidation after the strong gains of the prior three weeks,” ANZ Head of Australian Economics David Plank said. “It remains well below average, however, as do all of the sub-components.”

The ‘time to buy a major household item’ category rose for the fourth consecutive week, up 8.2%.

The preliminary ABS data for March 2020, released on 22nd April, showed that retail turnover was up 8.2%. However, final figures for the month will not be released until 6th May.

Source: Preliminary ABS Retail Trade Figures for March 2020 as of 22.04.2020

In the ANZ-Roy Morgan survey, ‘current economic conditions’ strengthened by 13%, while ‘current finances’ rose by just 0.4%.

Australians appear to be more worried about future conditions, however. The ‘future economic conditions’ category fell by 5.9%, while the ‘future finances’ category fell by 3.3%.

“After 29 years of uninterrupted economic growth many Australians have become accustomed to a growing level of prosperity, so we could expect to see an impact on people’s sense of financial wellbeing due to the virus,” NAB’s Head of Behavioural & Industry Economics Dean Pearson said.

In the NAB’s Australian Wellbeing Report for Q1 2020, financial anxiety rose across all key demographics, except among the unemployed, which was understandably already high.

Source: NAB

Moving forward, economic analysts are uncertain whether Australia’s consumer confidence will continue its modest recovery.

“We are at an important stage in Australia’s response to the pandemic, with a number of states relaxing some restrictions. If successful, that could set the stage for a further gain in consumer sentiment,” Plank said.

The state governments of Queensland and Western Australia have relaxed some COVID-19 restrictions, and this morning the premier of NSW announced some easing of containment measurements that will be brought in this Friday.

At the same time, more bad news lies ahead, which will impact consumer sentiment. “Unfortunately, confidence is likely to be challenged by the publication of some very negative economic data over the coming month, after a period in which the data has not caught up with the severity of the economic impact from the lockdowns,” Plank said.

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