Despite the fact that the world is still reeling from the impacts of the pandemic and many western countries are still in lockdown, Australians are very bullish about the future.

Westpac reported this morning that its index was 48 per cent above the low in April and had reached its highest level since October 2010 – marking a ten year high.

“After only eight months the evidence seems clear that sentiment has fully recovered from the COVID recession,” Westpac senior economist Bill Evans said.

Westpac believes the boom in house prices has been a factor as well as the Government’s revision of unemployment expectations. More than half of the people surveyed for the index said they viewed the economy favourably.

Even politics was being viewed favourably by 70 per cent, a doubling of the figure since this time last year and the best result since 1975 when the Whitlam government was thrown out.

Consumers overwhelmingly saw the events occurring overseas as unfavourable.

ANZ also revised up its GDP forecasts. It now expects growth of 4.4 per cent in 2021 and unemployment of 6.6 per cent.

Westpac said the behaviour of the index highlighted the difference between this recession and the downturn during the Global Financial Crisis and the recession of the early 1990s.

“These differences relate to the nature of the shocks; the resilience of the financial system; and the rapid, proactive responses from authorities which have been critical to containing the economic damage.

“While the index reached comparable lows in all three episodes, the recovery in sentiment in the COVID recession has been much more rapid. After eight months following the low in the GFC, sentiment had only recovered by 8.4 per cent.

“It took a full year before it was clearly signalling that the crisis had passed.

“In the early 1990s it took nearly three years from the lows before sentiment was into a sustained upswing.”