Saturday, 27 November, 2021

Australian consumer sentiment edges up

SYDNEY: A measure of Australian consumer sentiment inched higher in November as optimism on the economy just outweighed worries about personal finances, while the outlook on employment took a marked turn for the better.

The Westpac-Melbourne Institute index of consumer sentiment released on Wednesday added 0.6 per cent in November from October, when it dipped 1.5 per cent, report agencies.

The index reading was down 2.2 per cent on November last year, though at 105.3 it meant optimists still outnumbered pessimists.

Westpac chief economist Bill Evans noted the biggest shift came in expectations about employment, which were at their best level since the mid-1990s.

“Confidence is at historic highs for both males and females although the confidence amongst females is particularly buoyant - near all-time record levels going back to 1975,” said Evans.

Sentiment has generally improved over the last few months as a surge in vaccinations allowed coronavirus restrictions to be eased in Sydney and Melbourne.

That was reflected in the survey’s measure on the economic outlook for the next 12 months, which rose 3.3 per cent, while that for the next five years firmed 2.6 per cent.

In contrast, the measure of family finances compared with a year ago fell 4.5 per cent, while that for finances over the next 12 months eased 0.7 per cent. The pullback could be due to media coverage about rising inflation and the risk of an increase in interest rates.

The index of whether it was a good time to buy a major household item did gain 1.8 per cent in November, though that was still down 7.8 per cent on a year ago.

A special question on spending intentions for the Christmas shopping season showed the proportion of respondents expecting to spend less was the lowest on record at 26 per cent, while 10 per cent planned to spend more.

“Overall, the net proportion of ‘spend more minus spend less’ is the second best since the survey began,” said Evans. “It seems that consumers are determined not to allow their spending to slip back further while at the same time being cautious about over-extending.”