Australia Consumer Sentiment Rises In June: Westpac

Australia consumer confidence improved in June but remained firmly in the negative zone largely due to concerns about inflation, growth and interest rate outlook, survey data from Westpac showed on Tu...

Written by: RTT Staff Writer • Tuesday, June 25, 2024 • 2 min read

• Last updated: Tuesday, June 25, 2024

Australia consumer confidence improved in June but remained firmly in the negative zone largely due to concerns about inflation, growth and interest rate outlook, survey data from Westpac showed on Tuesday.

The Westpac-Melbourne Institute Consumer Sentiment Index rose to 83.6 in June from 82.2 in May.

Despite the improvement, consumer confidence remained deeply in the pessimistic territory. A score below 100 suggests that pessimists outnumber optimists.

“The survey detail suggests positives from fiscal support measures are being negated by increased concerns about inflation and the outlook for interest rates”, Westpac Senior Economist Matthew Hassan said.

The ‘family finances vs a year ago’ sub-index logged a particularly strong 9.7 percent lift in June. However, at 69.3, the index remained very weak.

Likewise, the ‘time to buy a major item’ sub-index posted a solid 4.2 percent rise but remained at a very weak level of 79.7.

The ‘family finances next 12 months’ index rose only 0.4 percent to 96.5 in June.

The survey showed that consumers were becoming more uneasy about the economy, especially over the next year. The sub-index tracking assessments of the ‘economic outlook, next 12 months’ dropped 5.7 percent to 78.5, which was the lowest level since October last year.

At the same time, consumers were less rattled about the longer-term view as the ‘economic outlook, next 5 years’ sub-index advanced 2.1 percent to 94.1.

The Westpac-Melbourne Institute Mortgage Rate Expectations Index, which tracks consumer expectations for variable mortgage rates over the coming year, climbed notably by 6.2 percent to 141.2, marking the highest reading since the start of the year.

The survey suggested that more consumers expect unemployment to rise over the coming year. The Westpac-Melbourne Institute Unemployment Expectations Index gained 2.5 percent to 133.1 in June, pushing further above its long run average of 129.

The Westpac Melbourne Institute Index of House Price Expectations climbed 1.7 percent to 163.8, on par with the peak recorded in early 2021.

Further, the interest rate expectations index climbed 6.2 percent to 141.2 in June.
The board of the Reserve Bank of Australia next meets on August 5 and 6. Westpac expects the bank to again leave the official cash rate unchanged.