Australia Westpac Consumer Confidence Remains Near Historical Lows

Australia’s consumer confidence remained unchanged near historical lows in March as rising interest rates continue to dampen households’ near-term financial and economic expectations, survey data from Westpac showed on Tuesday.

The consumer confidence index held steady at 78.5 in March. This marks the second consecutive month of extremely weak consumer sentiment.

Of the total nine sub-indices, five declined and other four improved from February. The ‘time to buy a major household item’ sub-index fell 4 percent to 74.9 in March.

At the same time, the ‘family finances vs a year ago’ sub-index rose 2.2 percent. Meanwhile, the ‘family finances, next 12 months’ indicator registered a 1.8 percent fall.

The ‘economic outlook, next 12 months’ sub-index declined 2.3 percent to 73.3, the weakest read since August 2020. By contrast, the ‘economic outlook, next five years’ sub-index posted a solid 5.6 percent growth to 95.3.

For housing, interest rate rises dampened property market activity. The ‘time to buy a dwelling’ index fell 11.1 percent to an extreme low of just 65.7.

The Westpac-Melbourne Institute Unemployment Expectations Index rose a further 2.9 percent in March.

Despite the latest rise in interest rates and expectations of more to come, the Westpac Melbourne Institute House Price Expectations Index posted a robust 8.6 percent rise in March.

The Interest Rate Expectations Index slid 3.6 percent to 180.3 in March.

The Reserve Bank Board next meets on April 4. Reserve Bank of Australia governor has now opened the door to a potential pause in April, Westpac Economist Bill Evans said.

Economists widely expect interest rate hikes in March and April.

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