Australian consumer confidence declined notably in September and remained in a ‘cautiously pessimistic’ territory, survey results from Westpac showed on Tuesday.
The Westpac-Melbourne Institute Consumer Sentiment Index declined 3.1 percent to 95.4 in September from 98.5 in August.
The third 25 basis-point interest rate cut from the Reserve Bank of Australia had boosted sentiment in August but it was followed by another partial pull-back. The index remained firmly back in ‘cautiously pessimistic’ territory overall, Westpac said.
Among five sub-indices of consumer sentiment index, two tracks assessments of family finances, another two track expectations for the economy and one on whether consumers see now as a good time to buy a major household item.
The ‘family finances vs a year ago’ sub-index rose a further 2.6 percent to 86.3 in September. Similarly, the ‘family finances, next 12 months’ sub-index edged up 0.9 percent to 107.7.
By contrast, the ‘economic outlook, next 12 months’ indicator slid 8.9 percent to 92.2, while the ‘economic outlook, next 5 years’ sub-index eased 5.9 percent to 92.7.
The ‘time to buy a major item’ sub-index declined 3.4 percent to 98.2, slipping back into slightly pessimistic territory after a brief nudge into positive last month.
Consumers were a little less confident about the prospect of further interest rate cuts. The Westpac-Melbourne Institute Mortgage Rate Expectations Index, which tracks consumer expectations for variable mortgage rates over the next 12 months rose 5.2 percent to 88.
The survey showed that concerns about the economy weighed on sentiment regarding jobs. The Westpac-Melbourne Institute Unemployment Expectations Index rose 4.6 percent to 131.4 in September. The higher index reads mean more consumers expect unemployment to rise over the year ahead.
Further, the survey revealed that homebuyer sentiment dipped slightly with the ‘time to buy a dwelling’ index down 1.7 percent to 96.1.
At the same time, the Westpac-Melbourne Institute Index of House Price Expectations climbed 2.6 percent to hit a 15-year high of 168.4.
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