Consumers confident for Christmas spending
The Roy Morgan Consumer Confidence Rating rose to 120.1 this week, up 1.3pts in a weeks since the last week of November. With confidence driven mainly by respondents saying they felt now was a good time to buy major household items while also being more confident about their own personal financial situations and savings.
According to the report, an increasing majority of Australian (55%, up 4%) believe now is a good time to spend on household items such as white goods and home entertainment on top of the expected swell in Christmas retail spending. Only 17% of Australian consumers say that nor is a 'bad time to buy.'
Confidence is also up in the area of personal finance and with more people expecting their finances to improve over the coming 12 months. In fact, 40% of Australians now expect to be better off financially this time next year compared to 11% who expect to be worse off in 12 months time.
According to Gary Morgan, this up shift comes in parallel to a fall in the Australian dollar. "Just three weeks before Christmas, 55% of Australians are saying now is a 'good time to buy' major household items. The rise in consumer confidence comes as the Australian Dollar fell to a three-month low below 91US cents. The falling Australian Dollar will put upwards pressure on the prices of imported goods, though likely not impact heavily on the stock already available for Christmas," Morgan said.
Gary Morgan also suggested that the RBA would have been wiser to have dropped Australia's interest rates a further 0.5% in it's final meeting for 2013, rather than keep them at current levels, "To really provide an immediate boost to the Australian economy in the lead-up to Christmas, the RBA must cut Australia's interest rates. Australia's interest rates, at 2.5% are amongst the highest in the developed world and a reduction would provide the economy with a welcome boost," he said.
In the lead up to 2014, those who expect to be financially better off could look at investing their extra savings in a high interest savings account or term deposit, to measure their success over the 12 months to come.