A common word used by equity analysts to describe the Australian consumer through the current company reporting season has been “resilient”.
Share prices for several consumer-facing companies have performed well, in part because analysts’ pessimism hasn’t been borne out in company results. The S&P/ASX Consumer Discretionary index is at an all-time high.
Some consumer discretionary stocks have risen because of relatively positive updates on recent trading conditions and/or expectations of better trading conditions ahead.
While the consumer discretionary share price index has risen by ~20% since end-2023, it has been a far from even performance across major stocks.
Let there be no doubt, consumption growth has been weak…
In what looks like a contrast, economists have been highlighting the weakness in (real) consumer spending growth in Australia for well over a year.
Growth in (real) household consumption in Australia has been well below the pre-pandemic decade average and consumer confidence in Australia remains relatively weak.
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