Consumer confidence across Australia increased 3.6 points to 87.5 in early January, similar to previous yearly starts, with economists predicting that shoppers will get more confident in the months ahead.
The recent lift in ANZ-Roy Morgan Consumer Confidence is now 2.7 points above the same week a year ago, and 4.6 points above the 2024 weekly average of 82.9.
ANZ economist Madeline Dunk said while it is not unusual for a confidence boost in the first week of the year, the recent bump up represented a top-three result since the beginning of 2023.
“The ‘time to buy a major household item’ subindex recorded its third highest reading since June 2022, though was below the Black Friday peak,” Dunk said.
“We expect the upward momentum in ANZ-Roy Morgan Consumer Confidence to continue through 2025, as tax cuts, rising real wages and eventually rate cuts support household disposable incomes.”
Dunk said ANZ Research expects the first Reserve Bank rate cut to happen in May 2025.
The key driver of the recent confidence boost was an improvement in sentiment regarding buying intentions during the post-Christmas sales period.
Under a quarter of Australians (21 per cent - unchanged) say their families are ‘better off’ financially than this time last year compared to 46 per cent (down 3 ppts) that say their families are ‘worse off’.
Views on personal finances over the next year entered positive territory in the new year with a third of respondents (33 per cent - up 2 ppts) expecting their family to be ‘better off’ financially this time next year, while 29 per cent (down 3 ppts) expect to be ‘worse off’.
Views on the economy over the next year were virtually unchanged this week with 9 per cent (down 1 ppt) expecting ‘good times’ for the Australian economy over the next twelve months compared to 29 per cent (down 1 ppt) that expect ‘bad times’.
Net sentiment regarding the Australian economy in the longer term improved slightly this week with 12 per cent (up 2 ppts) of Australians expecting ‘good times’ for the economy over the next five years compared to 19 per cent (unchanged) expecting ‘bad times’.
Meanwhile, there was an improvement in buying intentions to start the New Year in line with the post-Christmas sales period with 28 per cent (up 3 ppts) of Australians saying now is a ‘good time to buy’ major household items compared to 42 per cent (down 5 ppts) that say now is a ‘bad time to buy major household items’.