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Australia: Political change further boosts consumer sentiment - Westpac

FXStreet (Bali) - The Westpac Melbourne Institute Index of Consumer Sentiment rose by 3.9% in November from 97.8 in October to 101.7 in November.

As Bill Evans, Chief Economist at Westpac, notes: "This is a cracking result. Apart from the brief surge we saw following last May’s Budget this is the highest print for the Index since January 2014. The Index is now 8.3% higher than in September, immediately preceding the change of leadership in the government."

Evans adds: "The increase also comes despite the banks’ decisions to raise mortgage rates for both owner occupiers and investors. It is surprising that such events did not have a negative impact on confidence. It appears that such is the boost to confidence from the recent political events that the impact of the interest rate increases was comfortably contained Most remarkably, the confidence of respondents who hold a mortgage increased by 4.1% – a slightly larger increase than the rise in the overall Index."

Evans also points out that Christmas spending outlook came at a seven year high: "Another encouraging sign for the Christmas spending outlook comes with our special question: “Do you expect to spend more; less; or about the same on Christmas gifts compared to last year”. Since we started this question, seven years ago, the average proportion proclaiming ‘more’ has been 12.5%. Today’s survey scored 16.9% whereas ‘less’ registered 29.6% compared to the average of 34.7%. Consumers in NSW were particularly upbeat with more planning to increase than cut Christmas spending compared to a year ago."

"In fact, this survey shows the most positive mix of Christmas
spending plans since we began running this special question in 2009 – a very encouraging signal in the lead in to the holiday period", Evans adds.

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