The ANZ-Roy Morgan Research (RMR) consumer confidence index continues to gradually recover following its Budget induced shellacking, registering a 2.5 point lift in the week ended 22 June to be up 6.4% from May’s low (see next chart).
While the rebound in confidence is obviously welcome, it is important to note that consumers remain depressed, with the ANZ-RMR index still 7.0% below the long-run average reading of 113.7, and some 10% lower than at the end of April.
The below chart, which plots the Westpac-Melbourne Institute’s Consumer Sentiment index against the ANZ-RM Consumer Confidence index, highlights the mood of the Australian consumer more clearly:
Clearly, both indices warrant close monitoring in the months ahead. For if they fail to bounce back strongly, then it could have widespread negative impacts on the housing and retail sectors, and in the process thwart the RBA’s plans to rebalance the Australian economy away from mining.
