Australia: Elections have minimal impact on consumer sentiment - Westpac

Matthew Hassan, Senior Economist at Westpac, suggests that with a Australian Federal election due to by May next year and local political themes very much ‘in the air’ in recent months it is worth reviewing how elections have influenced sentiment in the past.

Key Quotes

“Election periods and their results can often impact business confidence and activity, the influence on consumer sentiment looks to be smaller and more nuanced. Some of this is to be expected – an election poll should, provided it does not end in a ‘hung result’ and is an accurate reflection of the popular vote, reflect the broad opinion of consumers and hence be unlikely to be viewed as an unwelcome shock by most.”

“The data seem to confirm this broad idea. Sentiment impacts from Federal elections are hard to pinpoint at an aggregate level. Over the full history, there do appear to have been some negatives when a contest is close and some initial boost when an election results in a change of government.”

“Overall that suggests the headline sentiment response likely depends on the reactions of these large swing and ‘unaligned’ groups.”