Australia: Consumer confidence sees sharp jump in May
May 20, 2015
The Westpac-Melbourne Institute Survey of Consumer Sentiment rose from 96.2 in April to 102.4 in May, which is the highest reading in 16 months. The indicator has now crossed the 100-point threshold that separates optimistic from pessimistic territory where it had been hovering for 13 of the last 14 months.
May’s reading came as the Reserve Bank of Australia lowered its cash rate on 5 May by 25 basis points and a consumer-friendly federal budget was released on 12 May. Both factors are believed to have a strong impact on consumer sentiment. The institute indicated that although both factors had a positive effect on the survey, it was the budget that had the strongest impact. The institute further pointed out that, “the score associated with the 2015 Budget is the highest since 2010. That score contrasts with the 2014 Budget of minus 56.1.”
Author: Robert Hill, Economist