Chamber Talk with QT Better Business columnist Brett Kitching.
Chamber Talk with QT Better Business columnist Brett Kitching.

Australian confidence on the rise despite international woes

AUSTRALIAN confidence has surged since the election in early September, a trend which is reflective at home here in Ipswich as well.

This has been shown in the Westpac Melbourne index of consumer sentiment for October. Despite a slight dip in the index in October, the September post- election rise was significant and overall the index is almost 10% higher than at the same time in 2012.

This news is supported in Queensland and includes Ipswich where reports of increasing growth, reducing unemployment, growing investor interest from interstate, and a property market which has started moving forward both in quantity of sales, and prices of properties.

However a number of international trends are trying hard to erode this new- found domestic confidence. The incredible shut- down of the USA government over the past fortnight has combined with continually softening Chinese demand to put a dampener on certain areas of this growing domestic consumer sentiment.

Thankfully a compromise was reached to raise the debt ceiling on the US economy and at least delay a possible US default. In response to this the Dow Jones surged to be back near all- time high levels.

The impact on Australia was a rising Aussie Dollar which is now 7% higher than its August lows compared to the greenback, and a stronger share market.

The share market increase was partly due to the positive news from the US but also resultant from the reported rises in domestic consumer sentiment.

The higher Australian dollar comes as a double whammy for the mining sector, for so long a major contributor to Australian GDP. In recent times the slowing of Chinese growth has resulted in weakening commodity prices and weakening investment in mining assets.

Despite continuing international economic woes, regions of Australia like Ipswich will benefit from rising consumer sentiment, rising population, rising growth rate, and rising property market activity which are all promising an exciting future.