The ANZ-Roy Morgan consumer confidence index has found encouraging signs for consumer spending. Photo: Sandy Scheltema
Consumer confidence has edged back above its long-run average, rising 0.9 per cent to 113.5 in the week ending August 24, according to the ANZ-Roy Morgan weekly survey.
"Confidence continues to recover from its recent setback (which likely reflected 'sticker shock' from the unexpected rise in the unemployment rate), supported by solid fundamentals such as low interest rates and rising house prices," ANZ says.
The rise in the index was driven almost entirely by an 11.1 per cent rise in household perceptions about their "financial situation compared to a year ago", the subindex most closely correlated with consumer demand.
This is an encouraging sign for consumer spending in coming months, ANZ notes.
"Signs that consumer confidence is bouncing back, combined with strengthening business surveys, gives us more confidence that the non-mining recovery remains on track," says ANZ chief economist Warren Hogan. '
'We expect consumer spending to remain moderate in 2014 before improving in 2015."