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Two-Week Increase in Consumer Confidence Shows Signs of Recovery
As business confidence plummets in March, consumers are feeling a little more at ease in the first week of April. After nearly a month of consecutive falls across each State and Territory, Australian consumers are showing signs of positivity once again.
Consumer confidence has risen 1.2 points, now sitting at 94.6, following three weeks of consecutive falls related to petrol price increases and the ongoing conflict in Ukraine. But as the prices of petrol have levelled out, dropping 40 cents per litre from its peak, Australians are feeling more at ease.
However, this week’s confidence levels remain a whopping 19.5 points below the same period in 2021 (114.1). Interestingly, the petrol prices at this point in 0221 were similar to what they are currently ($1.77 per litre).
“Consumer confidence rose by 1.3 percent last week, adding to the prior week’s gain of 2.5 percent, as petrol prices dropped sharply for a second straight week,” said David Plank, the ANZ Head of Australian Economics. “Confidence remains below neutral and well below its long-run average. Household inflation expectations remained unchanged at 5.8 percent, despite lower petrol prices. With the terminal gate prices of petrol declining further last week, retail prices are likely to be even lower in the coming weeks.”
Even with two weeks of increases in consumer confidence, buying intentions remained mostly unchanged. Only 32 percent of Australians say that now is a good time to buy a major household item -this figure remains unchanged from last week.
Those who say that now is a bad time to buy remain in the majority, currently at 40 percent. This is also an unchanged figure. While these intentions remain constant, they are likely set to change in the lead up to the Easter long weekend.
“The flow-through of the reduction in petrol excise should provide additional impetus. This should lead to lower inflation expectations and, along with the Easter holidays, this is likely to boost sentiment,” Plank continued.
There was a 6.1 percent increase in confidence among residents in NSW, following a six-week decline. There was also an increase of 10.4 percent in WA, whereas Victoria, Queensland and SA recorded decreases of 1.3 percent, 0.2 percent and 10.7 percent, respectively.
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