By James Glynn
SYDNEY--Australian consumer sentiment is recovering as vaccination rates across the country climb, raising expectations that lockdowns in major cities will soon be lifted, spurring spending and boosting the economy in the final months of the year.
The Westpac-Melbourne Institute index of consumer sentiment increased 2.0% to 106.2 in September from 104.1 in August.
"The resilience of consumer sentiment in a period when Australia's two major cities have been locked down and the economy has been contracting is truly remarkable," Westpac chief economist Bill Evans said.
The uptick follows National Australia Bank data Tuesday showing improved business conditions and confidence in August, with a report on consumer confidence by ANZ Bank also showing some strength.
The upbeat mood comes as New South Wales has outlined its exit strategy from lockdowns that have lingered since late June. Once vaccination rates exceed 70%, likely in October, mobility constraints will start to be eased in Sydney.
Despite expectations of a hefty contraction in gross domestic product growth in the third quarter, confidence is being supported by the government's firm fiscal response to the downturn, while businesses are reducing hours of work rather than winding up jobs entirely.
Confidence in New South Wales rose 5.3% to 106.4 while confidence in Victoria held steady despite the state moving back into another extended lockdown in early August, the Westpac-Melbourne Institute index data showed.
Sentiment also posted a strong 8.4% gain in Queensland, after the state moved out of its most recent lockdown in late August.
Write to James Glynn at firstname.lastname@example.org
(END) Dow Jones Newswires