- Bill Evans, Westpac chief economist
Consumer confidence in Australia strengthened this month, as Australians became markedly upbeat on the economic outlook, adding to signs that further cuts in interest rates might not be necessary. According to the latest Westpac-MI Australian consumer sentiment report, the gauge rose 3.9% to 101.7, reaching the highest level since May. It also showed that optimists outnumbered pessimists for the first time in past six months. The index of 101.7 was 5.3% higher than in November last year. The improvement came despite the recent decision by major Australian banks to raise their mortgage rates.
Respondents were markedly sanguine about the economic outlook. The survey's gauge of confidence in the economy over the next five years advanced 24.2% to the highest level since September 2013. At the same time the measure of economic conditions over the next 12 months also surged 5.8%, following a steep gain last month. Moreover, Australian retailers may enjoy a strong trading period ahead, as the index of whether it was a good time to purchase a major household item increased 4.8% in November. However, the survey's gauge of family finances compared to a year ago declined 2.2%, while the outlook for the next 12 months plunged 9.1%.
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