Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)
Australians who have had their coronavirus jab, or intend to do so, appear to be more upbeat about the outlook than those not willing to take part in the country’s vaccination program.
Overall, the Westpac-Melbourne Institute consumer sentiment index fell 4.4 per cent in August, but at 104.1 points and above 100, the index still indicates there are more optimists than pessimists.
“This is a significant further loss of confidence but better than might have been expected given virus developments,” Westpac senior economist Matthew Hassan said.
While the sentiment index is at is lowest level for this year, it remains comfortably above the 75.6 points hit during the 2020 national lockdown and the 79.5 points seen during Victoria’s second wave restrictions later that year.
“The virus situation locally is clearly troubling, but consumers appear reasonably confident that it will come back under control, and that once it does, the economy will see a return to robust growth,” Mr Hassan said.
“The availability of effective COVID vaccines is a key source of support for confidence.”
The survey found 76 per cent of respondents had either been vaccinated or intended to do so and were more confident by 10.7 points than those unwilling to get vaccinated or yet to make up their mind.
Even so, Mr Hassan said all index components recorded declines in August with the biggest falls around the expectations for the economy over the year ahead and whether it was good to buy a major item.
With half the population again in lockdown and virus outbreaks occurring in several states, business confidence and conditions have slumped, particularly in NSW.
But so far that hasn’t resulted in a deluge of firms having to close their doors for good.
New figures show the number of business defaults, court actions and voluntary administrations fell in July.
However, commercial credit bureau CreditorWatch warns that given the impact current restrictions are likely to have, and the reduced stimulus and insolvency protections compared to 2020, it is expected these figures will deteriorate in the short term.
It is particularly concerned about the hospitality and accommodation sector and retailers.
“We are confronting increasingly challenging times from a strong starting point,” CreditorWatch CEO Patrick Coghlan said.
“This will hopefully allow the economy to return to growth when lockdowns and other restrictions end.”
Business defaults fell by 20 per cent in July compared to a month earlier, court cases declined by 38 per cent and firms going into administration were down six per cent.
The National Australia Bank monthly business survey released on Tuesday showed not only were confidence and conditions down sharply, forward orders were also weak, suggesting these gloomy conditions will continue in the near-term.
That puts hiring and investment intentions at risk, as well as fuelling expectations the economy will contract in the September quarter.