(Bloomberg) -- Australian households are set to keep driving the economy's recovery, brushing aside the withdrawal of fiscal stimulus with the expiry of the government's JobKeeper wage subsidy, as confidence soared to the highest level in 11 years.
Consumer sentiment surged 6.2% to 118.8 points in April from a month earlier, Westpac Banking Corp. said in a statement Wednesday. The index is now at its highest since August 2010, when the economy was in its post-2008 crisis rebound and at the peak of a mining investment boom.
“This is an extraordinary result,” said Bill Evans, chief economist at Westpac. “The survey continues to signal that the consumer will be the key driver of above-trend growth in 2021.”
Confidence improved across all states and in four of the five subcomponents of the index. The “time to buy a dwelling” index fell by 7.9%, with buyers appearing discouraged by the recent surge in prices and the implications for affordability.
Australia has recovered rapidly from the pandemic, powered by a fiscal-monetary boost and the early containment of Covid-19. That's driven a surge in hiring and a corresponding decline in unemployment that appears set to continue even as the government's wage subsidy came to an end late last month.
A National Australia Bank Ltd. report Tuesday showed business conditions -- measuring hiring, sales and profits -- climbed to a record high.
“Clearly, confidence would have been buoyed by positive news around the labor market,” Evan said. He noted that job vacancies were reported to be 27% above February last year.
Australia's unemployment rate likely edged down to 5.7% in March from 5.8%, economists predicted ahead of jobs data out Thursday,
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