By Aimee Chanthadavong

Retailers should be celebrating after a key measure of Australia’s consumer confidence rebounded modestly by 1.9 per cent in February from 104.6 in January to 106.6 in February.

These positive results of the Westpac-Melbourne Institute Index of Consumer Sentiment follow the 5.7 per cent fall that was seen in the index in January, which was conducted over the week when the floods in Brisbane and regional Queensland dominated the news.

“We can best describe the result in February as a modest rebound from the strong reaction to the floods in January,” Bill Evans, Westpac chief economist, said.

“This rebound may have been stronger had it not been for the Cyclone Yasi which dominated the news during the week of the February survey.”

The survey also assessed whether it’s the ‘time to buy a major household item’, which revealed that it remained steady lifting by 0.8 per cent. Over the last six months, this component has averaged 141.5 – on a par with the highest sustained levels of the last 25 years.

According to Evans, retailers should be “perplexed by the resilience” of whether it’s a good time to buy major household items.

“It’s a fairly well established relationship between consumer sentiment and spending and so the overall index points towards a cautious consumer. It’s just that the component on major household items, which has a very good record in explaining retail spending, is sending a much more optimistic signals than what is turning to be the case,” he said.