Australia’s business conditions and confidence are well above average whilst consumer sentiment remains dour as the latest business survey showed conditions at post-GFC highs while August was the ninth consecutive month where consumer pessimists outnumbered optimists - we have not seen such a succession of weak reads since 2008, explains the analysis team at Westpac.

Key Quotes

“Australia’s heavily indebted consumers are feeling the impacts of high energy prices, stretched housing affordability and limp wages growth.”

“In our view, it seems likely weak wages growth is the key driver of this divergence. Despite low unemployment rates in many countries, low wages growth appears a global phenomenon, suggesting it could be a (perceived) labour supply problem. Governor Lowe recently suggested workers are fearful of two sources of acute competition – globalisation and technology hence not demanding pay rises.”