Advanced Search

Share Coverage



Category: Business, Economics and Finance / Economic Trends / Consumer Finance / Banking / Markets / Money and Monetary Policy

Consumer sentiment sustained in March on economic optimism: survey

Wednesday, 15 Mar 2017 09:27:23 | Thuy Ong

Expectations on the economic outlook over the next year rose 1.6 per cent. (AAP: Alan Porritt)

Consumer sentiment has been sustained in March from February, as optimism on the country's economic outlook outweighed worries about family finances, according to a new survey.

The Westpac Melbourne Institute Index of Consumer Sentiment rose by 0.1 per cent, rising from 99.6 in February to 99.7 in March, heading towards the number where the number of optimists matches pessimists.

Expectations on the economic outlook over the next year rose 1.6 per cent, while the outlook for the next five years gained 3.9 per cent.

Meanwhile, house price expectations continue to rise, jumping 2.2 per cent to be 26.7 per cent above the level of a year ago.

"Even though income growth and inflation are too low and there remains ample spare capacity in the labour market, the [RBA] has no flexibility to cut rates," Westpac chief economist Bill Evans wrote in the report.

"The evidence is clear that the rate cuts the bank embraced last year in the face of low inflation fuelled house prices and household leverage. The bank is concerned about possible excesses in the housing market."

Markets expect the RBA will remain on hold for 2017 but will price in at least two hikes in 2018.

"We expect that the growth in the economy will slow in 2018 as the residential construction boom unwinds," Mr Evans wrote.

"Households are concerned about their finances, largely because of weak income growth."

Unemployment expectations fall

Unemployment expectations fell 3.1 per cent in March, dropping to December levels. Lower readings on that index means more consumers expect unemployment to fall over the next 12 months.

Meanwhile, the sub-index that measures "family finances compared to a year ago", dropped 5.3 per cent, and is the lowest level since June 2014 when respondents were "shaken by the May Budget announcement" that was handed down by former treasurer Joe Hockey.

The Westpac-Melbourne Institute survey is based on 1,200 respondents aged 18 and over across Australia and asks for information on news stories that have affected their views and whether or not that news has been well received.

Westpac said overall awareness of budget and tax news had dropped significantly from a year ago. Meanwhile, well-received stories included employment at 15.7 per cent, interest rates at 15.6 per cent, and international conditions at 12 per cent.

"Despite no move by the Reserve Bank over the intervening period, news on interest rates was much more positively received while the pessimism around international conditions eased," the report said.

AustraliaPlus


 

Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.

沪公网安备 31010602000204号

Email this to your friend