Consumers who are focused on local property values and continuing jobs growth, have contributed to a 7.8% jump in the Westpac-Melbourne Institute consumer sentiment index from 92.2 in July to 99.5 in August. According to Westpac’s chief economist Bill Evans, the August leap follows a 3.3% slump last month, due to upheaval in equity markets in China and Europe.
However, this is still nearly 16% below the reading this time last year.
The 8% Index lift in May was directly linked to the Federal government’s better-than-expected budget and the quarter-point cash rate cut by the Reserve Bank of Australia.
“Movements of the index of this magnitude are unusual and generally associated with highly significant events such as interest rate moves or Commonwealth Budgets,” Evans said.
“It seems that with the tensions in Greece and the Chinese equity market no longer dominating the media, consumers are feeling more relaxed.
“Ongoing positive news around house prices may also have buoyed confidence,” he added.
The Westpac-MI survey was conducted from August 3 to 9.