The latest ANZ-Roy Morgan Consumer Confidence Index increased for the first time since the media coverage of the federal Budget.
Confidence rose 2.9 per cent last week after dropping by 12 per cent over the past six weeks, according to ANZ’s head of Australian economics, Justin Fabo.
“Given the extent of deterioration seen recently, developments in consumer confidence over the next few weeks will be watched closely for any early indications of the likely outlook for consumer spending,” he said.
The bounce in confidence was driven by a sharp improvement in perceptions of ‘economic conditions next year’ (+14.5 per cent), and perceptions of ‘economic conditions in the next five years’ (+4.0 per cent).
However, perceptions of ‘financial situation compared to a year ago’, which is most correlated with household spending growth, fell 3.1 per cent last week.
The index is now down a sharp 15 per cent since the most recent peak three months ago and suggests consumer spending could soften in the near term.