A measure of Australian consumer sentiment rebounded sharply in May as success in containing the coronavirus led to an easing in strict social distancing restrictions, offering hope for a relatively quick revival in spending.
Wednesday's survey showed the Melbourne Institute and Westpac Bank <WBC.AX> index of consumer sentiment jumped a record 16.4% in May, from April. That recouped most of April's huge 17.7% drop, which had also been the biggest since the survey began.
The May surge left the index at 88.1, which was still down 13% on a year earlier and well below the 100 level where optimists match pessimists.
"This represents an impressive recovery in confidence," said Westpac chief economist Bill Evans.
"Consumers are clearly heartened by Australia's success in containing the coronavirus which has justified the easing of some of the social restrictions that have been so painful for individuals and the economy over the last two months."
The survey showed a major improvement in the outlook for the economy over the next 12 months, which climbed 32.6%, while the index for the next five years rose 10.7%.
The measure of family finances compared to a year ago rose 5.5%, while the outlook for the next 12 months climbed 12.2%.
In a bright spot for hard-hit retailers the measure of whether it was a good time to buy a major household item surged 26.7%, though that was still down 16.6% on a year earlier.
"The response suggests retailers can expect more foot traffic as restrictions ease although the overall level of the index still suggests most consumers will be looking to keep spending on a tight rein," said Evans.
Respondents were also more confident about the outlook for job security amid expectations that a return to more normal conditions would allow many who had been stood-down to return to work.
There was also positive news for the housing market with the index of whether it was a good time to buy a dwelling jumping 31.8%, and reversing all of April's 26.6% drop.
(Reporting by Wayne Cole; Editing by Shri Navaratnam)
