As 2025 begins, the ANZ-Roy Morgan Consumer Confidence Index has experienced a significant uplift, rising by 3.6 points to reach 87.5, marking the highest start to a new year since 2022.
This increase is attributed to the typical “New Year’s bump” in sentiment, placing it 2.7 points above the same period last year and 4.6 points above the 2024 weekly average.
Consumer confidence saw an uptick in New South Wales, Victoria, Queensland, and Western Australia, highlighting regional optimism at the start of the new year.
However, South Australia recorded a decline, underscoring the varied economic conditions across the country.
The key driver of this week’s rise in consumer confidence was a notable improvement in buying intentions, particularly influenced by the post-Christmas sales period.
This suggests that consumers are more willing to make significant purchases at the start of 2025, reflecting a more optimistic outlook on personal financial situations.
About 21% of Australians feel they are financially better off than last year, a figure that has remained stable. Conversely, 46% believe they are worse off, showing a slight decrease from previous data.
Optimism about personal finances over the next year has grown, with 33% expecting to be better off, a rise from last year. Meanwhile, those anticipating tougher times decreased to 29%.
Sentiment regarding the economy over the next year remains largely unchanged, with a minority expecting “good times” ahead.
More Australians are slightly more positive about the economy's prospects over the next five years, with an increase in those expecting “good times”.
There has been a positive shift in attitudes toward purchasing major household items, aligning with seasonal sales events.
Now, 28% of Australians believe it is a good time to buy, an increase from previous figures, against 42% who still see it as a bad time.
ANZ economist Madeline Dunk (pictured above) highlighted the significance of this early 2025 surge in consumer confidence, noting it as one of the top three results since early 2023.
“While it is not unusual for a confidence boost in the first week of the year, this represented a top-three result since the beginning of 2023,” Dunk said.
Dunk also forecasts that consumer confidence will continue to grow throughout 2025, supported by tax cuts, real wage increases, and anticipated rate cuts, with the first expected by the Reserve Bank in May.
Read the ANZ-Roy Morgan Consumer Confidence report here. To compare with previous results, click here and here.
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