Australian consumers more confident on spending

A measure of Australian consumer confidence inched higher in December with respondents more willing to splash out on big ticket items, a promising omen for the all-important Christmas shopping period.

Wednesday’s survey showed the Melbourne Institute and Westpac Bank index of consumer sentiment tacked on 0.1 percent in December, from November when it gained 2.8 percent.

The index has now regained all the sharp drop suffered in September as political instability and hikes in mortgage rates by most of the big banks soured the public mood.

The December reading, compiled from a survey of 1,200 people, was up 1.1 percent on a year earlier at 104.4, meaning optimists outnumbered pessimists.
“The consumer mood continues to hold at cautiously optimistic levels,” said Westpac’s chief economist Bill Evans.

The main improvement came in the measure of whether it was a good time to buy a major household item which bounced 3.7 percent in December.

That helped offset softness elsewhere. The survey’s index of family finances compared to a year ago dipped 1.9 percent, while the outlook for the next 12 months eased 0.6 percent.

Its measure of economic conditions for the next 12 months climbed 0.1 percent, while the measure for the next five years slipped 1.5 percent.

Sentiment has held up well given mass media coverage of falling home prices, and there was some signs consumers thought a bottom might be near.

The survey’s measure of home price expectations rose 1 percent in December to 100, meaning those looking for a rise matched those tipping a fall.