It’s been nearly a full week since Malcolm Turnbull was sworn in as PM. And already, he’s boosted consumer confidence.
The latest ANZ Roy Morgan Consumer Confidence results are out. Consumer confidence is up by 8.7%. The index rating went from 105.3 to 114.5. ANZ labelled it the ‘Turnbull turnaround’.
Warren Hogan is the chief economist at ANZ. He explained why the jump was so sharp. Although you probably don’t need to be a professional economist to work it out.
‘The sharp jump in consumer confidence last week is a clear vote of confidence in the new Prime Minister, Malcolm Turnbull…For the bounce to be sustained, however, the new Prime Minister and his colleagues will need to deliver a medium-term reform strategy in the context of a clear economic story for the country.
‘…We believe the new Prime Minister’s first 100 days in office will be essential to formulating a new narrative for the economy that underpins confidence in the economic outlook.’
Hogan noted that Turnbull would have to deliver soon. Otherwise, consumer caution could re-emerge. The same way it did not long after the Coalition came to power. After all, Australians never completely forget about weak wages growth. Or what’s happening with the global economy. And both of these things factor in to their responses to the survey’s questions.
Speaking of the questions themselves, this week’s results raised some interesting possibilities. Specifically, the questions which ask whether the respondent expects better economic conditions. The proportion of people who expect better conditions in the next year shot up by 25%. The rating for that question is now at positive 3. It’s been in negative territory for several months. The proportion of people who expect better conditions in the next five years also rose, by 13.4%.
Interestingly, respondents are still cagey about their purchasing decisions. Compared to last week, the same number of people think it’s a bad time to buy a major household item. Only a few extra think it’s a good time. This indicates that people are optimistic about the future. But that they understand that PM Turnbull may take some time to ramp up economic reforms.
Consumer confidence has a way to go before it reaches the long term average.
Source: ANZ-Roy Morgan
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The good news is: Australia thinks our new PM has the potential to get it there.
Contributor, Money Morning
PS: While you wait to see what PM Turnbull brings to the table, spend some time getting smarter about where you put your money. There are several opportunities that will continue to be particularly attractive. Even if (or when) certain reforms are brought in.
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