Australia’s consumer confidence improved sharply in October following the announcement of the federal budget and the ongoing success in containing the Covid-19 outbreak, survey data from Westpac showed Wednesday.
The Westpac-Melbourne Institute Index of Consumer Sentiment advanced 11.9 percent to 105.0 in October from 93.8 in September.
The indicator gained 32 percent over the last two months to the highest level since July 2018.
All components of the index were higher in October. The most striking improvements were around the outlook for the economy.
The ‘economy, next 12 months’ sub-index increased 24.2 percent, while the ‘economy, next 5 years’ sub-index was up by 14.1 percent.
Respondents were also more positive about their family finances. The ‘finances vs. a year ago’ sub-index lifted 6.2 percent to the highest level since February 2016 and the ‘finances, next 12 months’ sub-index increased 9.4 percent to the highest level since September 2013.
The ‘time to buy a major item’ sub-index was up by 8.2 percent to 113.7. That level was still lower than the print in December 2019, indicating that households remain cautious about major spending decisions.
Bill Evans, chief economist at Westpac said one of the likely factors behind the surge in sentiment this month is an expectation that the central bank is set to cut the overnight cash rate to 0.10 percent from 0.25 percent at the meeting scheduled on November 3.
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