SYDNEY - Australian consumer confidence lifted in January as sentiment rebounded from its shock fall late last year, a survey has found.
The Westpac-Melbourne Institute index of consumer sentiment rose 2.6 per cent to 107.4 index points in January from 104.7 in December.
Westpac's chief economist Bill Evans said the
rise was merely a correction to the surprise fall in December.
"The index is still 12.8 per cent below its level of a year ago and 4.4 per cent below its average level in mid-2005," Mr Evans said.
"That general weakness in consumer sentiment is certainly consistent with the momentum in retail sales, where growth has slowed in trend terms from around 0.4 per cent per month in mid 2005 to zero in November 2005.
"We were mildly surprised by the fall in the index in December since petrol prices had fallen by 5.5 per cent prior to the December survey."
He said the rebound in the index was not consistent with the 3.2 per cent lift in petrol prices through to mid-January and that petrol prices appeared to have faded as a key driver of consumer sentiment for the time being.
Interest rates also appeared to have been less of an issue with confidence among mortgagees rising 4.8 per cent.
Mr Evans said that with the Reserve Bank of Australia (RBA) expected to have a more aggressive stance on interest rates - currently at 5.50 per cent -- rate concerns would soon re-emerge as an issue for consumers.
"Clear positive factors for consumers over the last month were the continuing good news on the share market, which reported record highs on five of the last nine trading days, and the stronger than expected employment figures confirming the near generational low unemployment rate of 5.1 per cent," he said.
Family finances compared to a year ago were up 3.2 per cent and expectations for the next 12 months rose by 2.3 per cent.
Expected economic conditions over the next 12 months jumped by 5.6 per cent but were still 16.6 per cent below last years level.
"Surprisingly, expectations for economic conditions over the next five years fell by 1.9 per cent to be 15.3 per cent below last years level," Mr Evans said.
- AAP
