The past one month and recent weeks give varied views on consumer sentiment in Australia with regard to Household sector while the common theme revolves around sentiments on future finances which seem to have taken a hit overall.
Decrease in consumer sentiment in November 2016 after rise of three consecutive months: The Westpac-Melbourne Institute Consumer Sentiment Index reported a fall of 1.1 percent to 101.3 in November 2016 against the 1.1 percent growth witnessed in October 2016 (based on a survey of 1,200 people). This represented the first decrease after growth observed in three consecutive months and the index continuing to be held in a very tight band. The drop came at the back of households becoming less confident of the property market and their finances. This might also be related to latest views of Reserve Bank of Australia (RBA) when it comes to home loans. The family finances measure for the month has fallen 1.5 per cent compared to a year ago period while economic outlook over the next 12 months is seen with a downfall of 0.5 per cent. A 2.5 per cent drop has been noted for the measure of ‘whether this was a good time to buy major household items’ owing to the below expectations outlook for Christmas spending. At a larger view, consumer confidence averaged 101.69 from 1974 to 2016 while January 2005 witnessed an all-time high of 127.67 and November 1990 witnessed a record low of 64.61.
Slip in sentiments on future finances this week: As per the recent ANZ-Roy Morgan Australian Consumer Confidence data, the index has moved up 0.3% to 118.2 in the week of November 15, 2016 post the 3.2% growth in the previous week. While there has been improvement in economic conditions, the financial conditions have suffered a blow with households’ views towards their finances dipping 0.8% this week compared to a year ago. Meanwhile, households’ views towards their future finances slipped 1.2% while household views on whether ‘now is a good time to buy a household item’ dropped 0.7%, this week.
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