Confidence tipped to rise as NSW reopens

The reopening of NSW after months of coronavirus lockdown, and high vaccination rates more broadly, should lift confidence among consumers and business.

A series of confidence measures are released over coming days and will reflect the mood in the run-up to Monday’s reopening of NSW, the nation’s largest economy.

Victoria and the ACT have also revealed their road maps out of lockdown in the past few weeks – Canberra will start reopening on Friday, while Victoria is due to start unwinding restrictions later this month.

On Tuesday the weekly ANZ-Roy Morgan consumer confidence index – a pointer to future household spending – is due.

Last week the index rose to its highest level since mid-July on the prospect of lockdowns being lifted, but still remains some way off its long-run average.

Consumer inflation expectations also remained elevated at levels not seen since 2014, coming at a time when petrol prices have hit a three-year high in recent weeks due to rising global oil prices.

The national average unleaded pump price rose by 1.7 cents per litre in the past week to 153.8 cents.

According to Commonwealth Securities, the benchmark Singapore gasoline price – a guide to future bowser prices in Australia – rose 6.8 per cent to a three-year high of $129.87 a barrel.

The National Australia Bank will also issue its business survey for September on Tuesday.

In August, business confidence – an indicator to future investment and job hiring – edged higher, but was still below its long-run average.

“Business confidence has been much more resilient this year than in the early stages of the pandemic, likely reflecting the strong momentum in the economy heading into the recent lockdowns and confidence that the vaccine rollout will see restrictions ease,” St George economist Matthew Bunny said.

“In September, while two of Australia’s major cities were in lockdown, there were improvements in the vaccine rollout which may have supported confidence.”

The October Westpac-Melbourne Institute consumer sentiment index will be released on Wednesday.

Confidence tipped to rise as NSW reopens
Independent Information