Confidence bounce a 30-year high
Consumer confidence has enjoyed its biggest bounce in more than 30 years on the back of the Reserve Bank keeping interest rates on hold and the Gillard Government resolving its impasse with the nation's largest miners.
The Westpac-Melbourne Institute measure of consumer sentiment lifted by 11.1 per cent in July from June.
Westpac chief economist Bill Evans said while an improvement was expected, after a large fall in June, the size of the bounce was extraordinary.
"We were surprised at the vigour of the bounce back," he said.
"We saw a comparable surge in confidence in 2009 when households realised that Australia had avoided recession but at that time the Index was recovering from a much lower level.
"This is the strongest monthly increase in the index from a base above the 100 level since records began in the mid-1970s."
Mr Evans said the return of confidence added to the case for a further interest rate rise.
The Reserve Bank board next meets on August 3, after official inflation readings are released on July 28.
“We expect it to be sufficiently high to trigger a rate hike at the August meeting,” Mr Evans said.
The June reading had been affected by doubts over whether the Reserve would keep rates on hold while the then Rudd Government was in the middle of the argument over the resource super profits tax.
Confidence was up amongst all groups and components of the index, with the feeling of family finances compared to a year ago rising by 17.2 per cent.
Expectations for family finances in a year's time rose 7.3 per cent, while there was a similar increase on the question of whether it is a good time to buy a major household item.
The single largest change measured was among coalition voters with their confidence levels up almost 20 per cent. While Labor voter confidence was up only 3.9 per cent, they remain substantially more upbeat than their coalition counterparts.
Sentiment among metropolitan people rose more by than 12 per cent and stands 7.8 per cent higher than a year ago, while non-metropolitan confidence was up by 9.6 per cent although it stands 4.1 per cent lower than a year ago.Follow thewest.com.au on Twitter
West Rewards
Breaking
- 5:37 pm Loved-up couple halt Warrup logging
- 5:06 pm Child injured in Como crash
- 4:27 pm Father, son missing near Esperance
- 3:23 pm Woman jailed for laundering $100,000
- 2:07 pm Cop 'broke down' night before suicide
- 2:06 pm Rotto leavers must have 21-year-old in charge
- 1:51 pm Australian ship seizes drugs worth $5million
- 1:46 pm Perth world's 13th most expensive city
- 1:40 pm 'Strict alcohol rules' in FIFO camp
- 12:57 pm One in four shark attack deaths in WA
Most Commented
- Labor says to dump big banks 60 Comments
- Whitney Houston dies aged 48 35 Comments
- Libs wary of McGowan 26 Comments
- Sea Shepherd clash in icy waters 24 Comments
- Freo bans plastic bags 21 Comments
- Eagles not kidding around 4 Comments
- Freo in building height stoush 3 Comments
- NRL giants plan WA showdown 2 Comments
- Clarke injury creates skipper's vacancy 2 Comments
- Telstra reveals AFL live streaming plan 1 Comments
Sponsored links
ALSO ON THE WEST
'The West Australian' is a trademark of West Australian Newspapers Limited 2012.
All rights reserved.
28 Comments
Who are these people trying to kid? Consumer confidence is NOT at a 30 year high!!. Just ask the retailers: they can't sell anything. Houses are not selling
ReplySounds like some people are pre-spending their tax cheques in anticipation of a change in Government. Time will tell if either was/is a good idea. Survey must have been done in Toorak.
ReplyMedia reports in Eastern States tell a different story in the real world. Another case of statistics being manipulated for political purposes? Seems to be happening regularly lately, mining tax etc.
ReplyI agree with coops it it a lie, confidence is not at a thirty year high, this is about getting interest rates up all we here about is rates need to go up up and up the banks need it they are short of money!!!! what a scam this is the only country in the world that rates are going up at the speed...
ReplyThere is a murmur in the financial sector that RBA is considering .50 to a full 1.0 percentage rise in cash rates after the election. Believe me I personally hope the murmurs are just that..murmurs.
ReplyWhat a load of garbage.
ReplyPotential rate increases as a result of these results and all the other so called robust figures, excellent news for those with savings like me. And since everyone these days is only concerned about their own situations then so I will be to.
ReplyThis is rubbish. I know of houses that have been on the market for months with offers now being received less than owed on a mortgage.
ReplyHello people, the report was conducted by Westpac, in cohort with the Reserve Bank, to generate some false sense of confidence, with one purpose in mind: TO INCREASE INTEREST RATE.
ReplyYep I have had about it with the head that cannot be still while talking
Reply