Buyers seeing bright side
Consumer confidence returns to pre-virus level
CONSUMER confidence has bounced back to its pre-coronavirus pandemic levels this month, with the easing of COVID-19 restrictions giving people something to be optimistic about.
The Westpac Consumer Sentiment index rose 6.3 per cent to 102.1 in May – taking the index back above 100, meaning there were more optimists than pessimists about the economy – among the 1200 people surveyed in the first week of June.
Westpac chief economist Bill Evans says that after a 16.4 per cent rebound in May, the index has now recovered all of the 20 per cent fall that came when the pandemic exploded across the world and reached Australian shores at the start of the year.
“Confidence has clearly been buoyed by Australia’s continued success in bringing the coronavirus under control, which has in turn allowed for a further easing in social restrictions,” Mr Evans (pictured) said.
“We have also seen more even confidence levels in the major states as restrictions begin to be eased extensively across the country.”
Mr Evans said the consumer sentiment index was now only 2 per cent below the average reading in the preceding September to February period, as confidence was already weak before the coronavirus shock.
He said any further strong gains in consumer confidence were unlikely due to the unemployment rate staying relatively high and some coronavirus restrictions staying in place in different jurisdictions.
“It would be surprising if the recent upward momentum continues and is able to sustain a stable level of confidence which is above that previous period,” he said.
Treasury secretary Steven Kennedy on Tuesday told a parliamentary committee the unemployment rate was ex- pected to be 8 per cent by September when the Jobkeeper r wage subsidy scheme is legis- lated to end.
Mr Evans said intense pres- sure on family finances and d concern about the near-term m outlook for the economy was likely to continue in the coming months, but optimism was expected to return over prospects for finances in the year ahead and the economy’s medium-term outlook.