Consumer confidence at 10-year high!
Weekly consumer confidence measured by Roy Morgan indicates that the 2021 weekly average is higher (110.4) than the weekly average between 1973 and 2021 (109.2).
According to The Westpac-Melbourne Institute Index of Consumer Sentiment Consumer Confidence in Australia reached an all time high of 123.94 points in May of 2007 and a record low of 64.61 points in November of 1990.
The Westpac-Melbourne Institute Index of Consumer Sentiment reported an increase of 2.6% to 111.8 in March, just 0.2 points below the December level 112, which was a ten-year high driven by improving economic conditions.
Consumer Confidence in Australia is expected to be 110.00 points by the end of this quarter, according to Trading Economics global macro models and analysts expectations.
You can see from the data below the consumer confidence has been on a steady, above-average rise since October 2020.
Not only is consumer confidence high, but Roy Morgan has reported a record breaking month in March for Business Confidence, rating at 124.0 the highest it has been since December 2013.
According to the AFR consumers spent a whopping $30.5 billion on retail sales in January, almost 11% above the same time last year. Why is this? Lower mortgages and rent payments as well as rising house prices are likely to be supporting sustained consumer spending.
Even as major fiscal stimulus starts to unwind, CBA economist Gareth Aird estimates a massive savings buffer will be drawn on by consumers to keep driving the spend.
“The household sector accrued a huge stockpile of cash in 2020. CBA estimates $125 billion or 6 per cent of GDP and a drawdown in these savings will be a significant tailwind on the economy over the next two years,” Mr Aird said.
What does all this mean for OOH? If consumer confidence is at an all time high, then consumer demand and spending is at an all time high - tried buying a new car lately? That wait list is long!
If spending is high then investment in advertising follows a similar trend - and we see more money flowing into the ad industry as a whole. Good news for all. Especially for OOH.
On April 06 the OMA announced the OOH industry’s Q1 performance - whilst we are down on Q1 2020 there the industry is on the road to recovery. OMA CEO Charmaine Moldrich said; “the result from March this year was particularly heartening, with revenue up 18% from February. This rise is coupled with the latest consumer confidence index, that is now just 0.2 points below December level which was a ten-year high.
I believe our recovery will continue into 2021 as audience numbers stabilise with people coming back to outdoors as well as workers returning to offices and the daily commute.”
If consumers are returning to pre-Covid mobility (see previous article on mobility data) and consumer spending and confidence is at an all-time high, then OOH and the ad market is well poised to bounce back to pre-Covid levels this year.
Keep your eyes out for more updates via our blog.