Australia: Consumer confidence rises above long-term average in November
November 15, 2011
In November, the index of consumer sentiment, published by Westpac and the Melbourne Institute, picked up to 103.4 points, which was 6.2 points above the 97.2 points recorded in October and marked a third consecutive month of improving sentiment. As a result of the increase, the index surpassed the long-term average of 100 points for the first time in the last five months and is now at its highest level since May this year. According to Westpac and the Melbourne Institute, the main driver behind the result was the RBA's decision to cut the reference cash rate on 1 November. The easing in the RBA monetary policy stance marks a positive note for Australian consumers, as it translates directly into lower rates for mortgage borrowers. Most sub-components of the index showed strong gains in November. The component that rose most notably was the one related to expectations about the economic situation in the next 12 months. Furthermore, although households' expectations regarding their future personal financial situation deteriorated, consumers' evaluation of their current financial situation improved strongly, leading to a 1.8% increase in intentions to purchase a major household item.
Author: Armando Ciccarelli, Head of Data Solutions