Consumer confidence has picked up slightly in October, rising 0.9% to 94.8, but there are still more pessimists about the economy than optimists, according to the latest Westpac/Melbourne Institute consumer sentiment report.
The index rose 0.9% in October from 94.0 in September to 94.8 in October.
Anna McPhee, CEO of the Australian National Retailers’ Association (ANRA), says the latest results showed uncertainty is hindering a recovery in consumer confidence, as consumers remain pessimistic about the future.
“Since the Federal Budget in May consumer confidence has stalled. Softer employment prospects and economic outlook continue to hold back significant improvements in sentiment. It is also likely the volatility of global financial markets and the falling Australian dollar would have contributed to October’s soft result.”
McPhee says indications this month that consumers are feeling slightly more confident about job security and employment prospects will assist incremental improvements in consumer sentiment over the long term.
“It’s gratifying to see improvements in forward looking indicators this month, such as ‘family finances vs a year ago’ (up 4.4%) and ‘family finances next 12 months’ (up 1.2%). Despite today’s static results, retailers will see the minor improvement of consumer sentiment, albeit in pessimistic territory, as an indication shoppers are beginning to feel more confident.
“It is important to note that retail sales are on a positive trajectory according to the ABS, and are continuing to track in the sustainable direction. Retailers are hopeful this sustainable upturn continues in order to meet the sector’s expectations to deliver six per cent year on-year growth by the end of the year,” McPhee says.