The polls, released by ANZ/Roy Morgan and National Australia Bank on Tuesday morning, showed consumer confidence rose 1.2 per cent in the first week of November, driven by a rise in the number of people feeling more confident about the economic outlook.
On the flip side, business confidence nationally remained subdued.
“Business confidence has been stubbornly sluggish in the past six months, despite solid business conditions, with the index dropping back to two index points in October (from five in September) – a positive result, but still well below the long run average,” NAB said.
ANZ chief economist Warren Hogan said the rise in consumer confidence reflected support for Malcolm Turnbull, who became prime minister eight weeks ago.
The results belie the mood of South Australian consumers and businesses captured in a long-standing state survey last week.
According to the BankSA survey, the enthusiasm was being felt by the SA business community and not by consumers.
BankSA chief executive Nick Reade attributed the buoyed business outlook to a new Prime Minister, as well as low interest rates, the Australian economy “not looking too bad” and flow-on from the past state and federal budgets.
But while nationally people were feeling more positive about the economy, confidence about personal finances was flat, a similar trend here where South Australians were putting off large purchases.
In figures released by the BankSA State Monitor Survey, overall business confidence had increased by 4.5 per cent, from 100.7 points to 105.2 points, since June this year but job security and a reluctance to make major purchases was stymying consumer certainty.
Hogan said the surge in national consumer confidence may hold the key to giving the non-mining parts of the economy a lift.
“The uptrend in confidence following the change in Australia’s political leadership is clear for all to see,” he said.
“An important question is whether this lift in confidence can be sustained and translate into stronger consumer spending.”
However, Hogan said a softening housing market, weak wages growth, and unemployment staying above 6 per cent would be obstacles to a sustained rise in consumer optimism in the coming months.
He added that this made the government’s economic policy platform even more important over the next six to 12 months.
Business conditions stayed strong in October, which is good news for the economy – not that the mood of the business community was showing it.
National Australia Bank’s index of business conditions – based on measures of trading conditions, profitability and employment – remained at a relatively high nine points in October.
That’s only a couple of points below the highest levels seen since the global financial crisis in 2008, and well over the zero level where positive and negative responses to survey questions are evenly balanced.
And it augurs well for the economy’s transition away from reliance on mining investment.
Consistently above-average outcomes since March offer reassurance that the recovery in the non-mining sectors of the economy is gaining more traction, NAB economists Alan Oster, Riki Polygenis and James Glenn said in their report on the survey on Tuesday.
“Services industries continue to outperform, while the mining industry trails well behind,” they said.
The business conditions index was also consistent with “solid outcomes” for the jobs market.
But business confidence was not so healthy.
Resolution of the Liberal Party leadership seems to have given confidence only a temporary boost, but it was hard to disentangle this effect from recent concerns about the international economy and financial market volatility.
But despite the concerns about confidence, the survey suggested that non-mining business investment was expanding at a faster pace than official figures from the Australian Bureau of Statistics indicate.
“In Australia, we remain of the view that the gradual recovery in the non-mining sector is gaining traction,” NAB’s economics team said.
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