In what could be positive news for retailers in Australia, new research from Roy Morgan has shown that more Australians are feeling better about their financial situation.
The weekly Roy Morgan Confidence Survey included 1,001 respondents in a face-to-face interview with a mixture of men and women aged over 14, and was conducted during May 11 and 12.
Survey findings showed that 42 per cent of respondents felt as though their financial situation was going to improve in the future, and they were going to be ‘better off’ in the next 12 months. This is a six per cent increase from the last time this survey was conducted earlier this month (May 4).
Australians are also expecting ‘good times’ in the next year, with 32 per cent feeling more positive about the Australian economy. This is a six per cent increase from the last survey’s results, and contrasts with the 28 per cent who expect ‘bad times’ for the economy.
Overall consumer confidence rose to 119.3 points after experiencing an increase of 5.7 points. This is 3.6 points higher than it was during this time last year.
Roy Morgan executive chairman Gary Morgan stated that the increase in consumer confidence could be attributed to the rate cuts made by the Reserve Bank of Australia (RBA) earlier this month.
The RBA found it prudent to slash the rate by 25 basis points, bringing it down to a new level of 2.75 per cent.
This rate cut has allowed many households to save money when making repayments towards their mortgages, while also saving for other general expenses.
This in turn will hopefully stimulate more households to spend more on retailing in Australia, especially with increased Australians feeling more comfortable about their personal financial situations.
However, to help encourage more confidence in the economy, Mr Morgan has stated that it would be wise for the RBA to continue to reduce the official cash rate due to the political uncertainty that is expected over the upcoming months.