Australia: Consumer confidence drops to two-year low
July 13, 2011
In July, the index of consumer sentiment, published by Westpac and the Melbourne Institute, dropped to 92.8 points, which was down from the 101.2 points recorded in June and represented the first time that the index had dropped below the long-term average of 100 points since May 2009. According to the survey, the reading was strongly influenced by ongoing uncertainty related to the global economic scenario ? stemming in particular from the Eurozone debt crisis. In addition, sentiment was negatively affected by the government's intention to introduce a levy on carbon emissions ? governing authorities actually launched the plan for a carbon tax a day after the end of the survey. All sub-components of the index dropped in July. The components that dropped most notably were those related to both the current and future economic situation. That said, households' expectations regarding their future personal financial situation deteriorated markedly, resulting in a lower willingness to purchase durable goods in comparison with the previous month's survey.
Author: Armando Ciccarelli, Head of Data Solutions