Consumer confidence soars to 11-year high in April
Australians shrug off end of JobKeeper and appear untroubled by vaccine delays, according to ‘extraordinary’ survey findings.
Consumer confidence has “soared” to an 11-year high as Australians shrugged off the end of JobKeeper and proved untroubled by widely publicised vaccine delays.
The Westpac-Melbourne Institute sentiment index jumped 6.2 per cent to 118.8 in April, the highest since August 2010 as households expressed “considerable” optimism about the trajectory of the economy and their future financial situations.
Westpac chief economist Bill Evans described the result as “extraordinary” in the context of a stream of negative headlines around major delays to the Morrison government’s vaccine rollout, and given wage subsidy scheme ended in the week before the survey was undertaken.
“Initial fears that (the end of JobKeeper) and associated job losses would undermine confidence have proven to be unfounded,” Mr Evans said.
The national survey of 1200 households was conducted between April 5 and April 10. Scott Morrison on the evening of April 8 released advice that the AstraZeneca vaccine would not be rolled out to those under the age of 50 – a significant setback.
Yet, consumer confidence has proved “resilient” to the bad news, Mr Evans said.
The further easing of restrictions and the associated upswing in the fortunes of those working in hospitality and recreational services led to strong gains in confidence for workers in that sector, of 14 per cent and 23 per cent, respectively.
It was a similar story for construction workers, where confidence jumped by 17 per cent in April amid a residential building boom.
Victorians recorded the biggest jump in optimism, up close to 12 per cent following the scare of the state’s short lockdown in March.
Mr Evans said surging property prices would also have buoyed the mood among homeowning Australians, although there were signs in the survey that affordability has become a greater concern.
The “time to buy a dwelling” index dropped by 7.9 per cent, from 116.4pts to 107.2pts, to sit nearly 20 per cent below its peak in November.
“Buyers appear to be discouraged by the recent surge in prices and implications for affordability,” Mr Evans said.
Respondents expect house prices to continue to climb. The related index increased further in April to sit 8 per cent above its pre-pandemic level and to its highest level since December 2013.
Australians have saved tens of billions of dollars of the massive emergency income support pumped into the economy by the Morrison government, and policymakers are betting that consumers will have the confidence to spend that cash over the coming year to help drive the economic recovery.
More Coverage
‘Green shoots’: CBA shows we’ve finally hit a turning point
The banking giant is the closest thing Australia has to a real-time measure of the economy. And big investors are now betting on an important shift.
Covid-era early access to super ‘didn’t work’
The Morrison government’s pandemic-era policy to grant cash-strapped workers early access to their superannuation did little to improve the wellbeing or financial stress experienced by those who withdrew from their savings, new research suggests.