This indicator measures changes in confidence of consumers and businesses about economic conditions. Confidence is measured using surveys that ask consumers and businesses questions about their confidence in prospects for the economy and their personal financial situation. While many consumer and business confidence surveys exist in Australia, most have small sample sizes, and produce data for Australia as a whole, or for different states and territories, but not for smaller regions such as local government areas, and not specifically for rural and regional areas compared to cities.

Consumer and business sentiment measures can provide insight into wellbeing through measuring how confident people feel about whether current economic conditions support their quality of life well, and whether they are confident they will be sufficient to support a good quality of life into the future.

Advantages: Confidence measures provide a simple, easy to understand measure.

Disadvantages:  Some aspects of consumer confidence do not necessarily have a direct or clear relationship to a person’s wellbeing.     

A number of long running consumer confidence surveys are published regularly in Australia, such as the long running Westpac-Melbourne Institute Consumer Sentiment Index which provides monthly data by state and territory, able to be downloaded.

To measure business and consumer confidence in a smaller rural community, it is generally necessary to conduct your own survey, as most data available in Australia is measured only at national scale, and sometimes for individual states and territories. Surveys of businesses can be used to measure business confidence, and surveys of local residents to measure consumer confidence.

A number of questions are used on different surveys to measure consumer and business confidence.  These are not always clearly described when results of consumer and business confidence surveys are released publicly. However, they sometimes are, with examples such as the Westpac-Melbourne Institute Consumer Sentiment Index providing useful guidance on how sentiment can be monitored. It is possible to ask similar questions in local surveys, and compare levels of confidence in rural areas to those for the state/territory as a whole in the sentiment index.