Australia: Consumer sentiment enters pessimistic territory
March 12, 2014
The Westpac-Melbourne Institute Survey of Consumer Sentiment fell to 99.5 points in March, which was down from the 100.2 points tallied in February and marked the lowest print since May 2013. As a result of March's drop, the indicator fell below the 100-point threshold that separates optimistic from pessimistic territory. The deterioration in consumer sentiment was mainly the consequence of, “the run of bad news around the motor vehicle industry,” as the country's main car producers recently announced closures in the next years. The announcements impacted negatively in consumers' job expectations, which were increasingly pessimistic. Moreover, the Institute reported that worries about future employment tallied the, “highest reading since we began running these questions in 1976.” Despite the deterioration in expectations regarding the labor market, consumers didn't express worries about the impact of the rise in jobless rate in their own finances. FocusEconomics Consensus Forecast panelists see private consumption growing 2.6% in 2014, which is unchanged from last month's forecast. In 2015, panelists see private consumption expanding 2.9%.