Australia: Consumer sentiment regains some lost ground in February
February 12, 2020
The Westpac-Melbourne Institute consumer sentiment index rose to 95.5 in February, from 93.4 in January, likely due to easing concerns around wildfires. However, sentiment remained below the 100-mark indicating that there were more pessimists than optimists among Australian consumers.
February’s uptick was chiefly prompted by improvements in the economic components of the index. Consumers’ outlook over the general economic situation in the next five years regained considerable ground in the surveyed month, although it remained entrenched in pessimistic terrain, as did consumers’ expectations over the general economic situation in the year ahead. This likely caused an increase in their willingness to buy major household item. On the other hand, consumers’ confidence regarding their current financial situation weakened somewhat in February, and their unemployment expectations worsened, despite two consecutive dips in the unemployment rate in November and December. Lastly, consumers were less inclined to purchase a dwelling, likely reflecting shifting expectations on interest rates ahead.