Consumers are set to spend more on essentials, housing and travel over the coming year, due to a nascent recovery in confidence.
An annual snapshot of 1400 households by brokerage CLSA found the share of people who thought they would be better off in a year rose to 40 per cent, the highest level since the survey began in 2011.
Respondents were also more optimistic about the housing market, with more than half the sample group tipping price rises in the year ahead, strengthening the case for a "modest" recovery in construction.
Against these trends, however, respondents were increasingly anxious about the threat of losing their jobs, which was likely to limit spending on discretionary retail.
CLSA's head of Australian research, Scott Ryall, said people earning more than $75,000 a year - the biggest spenders on discretionary retail products - were especially spooked by widespread cost cutting weighing on the jobs market.
"Most companies that we cover in the Australian market are looking to downsize or, at the very least, hold staff numbers flat," Mr Ryall said.
The broker predicted the environment would benefit defensive, consumer-facing businesses, including groups such as Wesfarmers, IAG and Tabcorp (gambling has been a haven in a soft economy). With household debt levels still high by international standards, the survey found most households wanted to maintain high savings rates, frequently for defensive reasons such as reducing debt or as a buffer against an income shock.
However, it also found that consumers' cautious approach was not preventing people from spending on holidays.
Saving for travel was the top reason for putting money aside.
"Above all else, Australians will still take a holiday come hell or high water," Mr Ryall said.
"That's something that, for the travel sector in particular, provides a glimmer of hope."