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Confidence on the rise, despite our slide into recession

Business

Australians appear to have taken confirmation of the country’s first recession in nearly 30 years in their stride.

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The weekly ANZ-Roy Morgan consumer confidence index rose one per cent, with respondents optimistic about future economic conditions, which jumped 4.1 per cent.

But ANZ head of Australian economics David Plank is quick to point out the survey was carried out before the Victorian government announced it was extending its harsh coronavirus lockdown.

“Even taking this into account, the uptick in confidence comes as a positive surprise,” Plank said.

“We had thought the release of the weak (June quarter) GDP report during the week, with the media in particular focusing on the confirmation that Australia is in recession, would have dampened sentiment overall.”

He felt the jump in “future economic conditions” may indicate that a number of people think the economic situation is close to the bottom.

Last week’s national accounts showed a major economic contraction, confirming the nation’s first recession since the early 1990s.

Consumer sentiment is a guide to future household spending.

Prime Minister Scott Morrison was clearly not happy by Victoria’s decision to extend the lockdown and then only gradually lift restrictions during October and into November, when he faced journalists on Monday, warning it will have a ripple effect across the nation.

Business groups have also expressed their frustration about Premier Daniel Andrews’ so-called roadmap out of lockdown.

“A further six weeks or more delay in restoring businesses, particularly in hospitality, will be the death knell for them and set Melbourne’s once-thriving metropolis back years,” Australian Chamber of Commerce and Industry chief executive James Pearson said.

“It is vital the Victorian Government listens to the community, including the people in business who provide the jobs and goods and services the community needs, and re-think its approach to a new COVID world.”

In more positive, NSW is on track for its second-biggest winter crop in a decade as production bounces back in many drought-ravaged areas of Australia.

National winter crop production is forecast to increase 64 per cent this financial year, according to the latest forecast by the Australian Bureau of Agricultural and Resource Economics and Sciences.

“Increased production in NSW has accounted for 60 per cent of the forecast increase in production nationally,” executive director Steve Hatfield-Dodds said.

-AAP

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