Rebound in Australia business conditions point to solid labour market in the near term

ANZ-Roy Morgan Australian consumer confidence halted four straight weeks of losses and rebounded strongly. After falling nearly 4% over the previous four weeks, the index bounced 3.4% in the week ended 17 April. The sub-index on whether ‘now is a good time to buy a major household item’ rose rose a solid 3.7%.

Upbeat Australian labour market and the business sector news along with a bounce in equity markets is likely to have boosted confidence. The key however is how confidences translates into spending.

The increase in confidence was largely driven by a bounce in consumers’ views towards the economic outlook. Views towards the ‘economy in the next 12 months’ bounced by a sharp 7.5%, and views towards the ‘economy in the next 5 years’ also rose strongly, up 5.2%.

"The strength in business conditions, which are now back at their highest levels since the GFC, point to a solid labour market in the near term." said Felicity Emmett, head of ANZ Australian Economics.