Australians Consumers Hopeful

Consumer sentiment is on the rise. In October 2024, the Westpac-Melbourne Institute Consumer Sentiment Index climbed by 6.2%, hitting its highest point in over two years at 89.8.

This is thanks to easing inflation at home and fewer worries about interest rate hikes by the Reserve Bank of Australia (RBA), alongside lower rates abroad.

Though it's still below average, there’s growing consumer optimism.

Business sentiment is following suit. September 2024 saw the NAB Monthly Business Survey's indices for Business Conditions and Business Confidence each gain three points.

Business conditions moved up to +7, and confidence reached -2. While forward orders stayed steady, a slight increase in capacity utilization to 83.1% indicates businesses are using their resources more effectively than usual.

Looking at the bigger picture, Australia is shifting its focus from combating inflation to boosting economic growth. According to Deloitte Access Economics, there are hurdles like low population growth and stagnant productivity. Still, they're forecasting growth: 1.2% for 2024-25 and 1.9% for 2025-26.

Consumer confidence varies across the regions, with slight gains in New South Wales, Western Australia, and South Australia, while Victoria and Queensland saw small declines. The ANZ-Roy Morgan Consumer Confidence Index stayed consistent at 86.7 in November, a level last seen in early 2023.

It shows a steady resilience with mixed personal financial situations—22% of consumers feel better off financially, but 48% feel worse.

Overall, there's a cautious but hopeful outlook. Potential rate cuts and a sense of economic optimism are helping to boost sentiment despite some lingering hurdles.