Consumer confidence levels in Australia are clawing back to the green as petrol prices drop significantly and buying intentions begin to improve.
After three weeks of consecutive falls, consumer confidence is starting to increase again, now lifting 2.3 points for the first time in nearly one month.
The current consumer confidence report is 93.4 this week. While the increase is readily welcomed, consumer confidence remains well below the same period in 2021 – 14.3 points in fact.
Buying intentions have also improved slightly, with 32 percent of Aussies saying that now is a good time to buy a major household item (up two percentage points). In contrast, 40 percent say that now is a bad time to buy – a drop of two percentage points from last week.
“Inflation expectations (IE) dropped 0.6ppt last week to 5.8 percent, as petrol prices dropped sharply,” said David Plank, the ANZ Head of Australian Economics. “We think this explains much of the lift in sentiment, though the focus on relieving cost of living pressures in the Federal Budget may also have played a part. The fall in petrol prices is likely due to lagged effects of the drop in crude prices since 8 March which have declined by nearly 20 percent since then.”
There could, potentially, be further lifts in consumer confidence as petrol prices continue to drop, Plank continued, which will be welcomed among consumers and retailers alike.
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