Australia’s consumer confidence weakened in January but things are expected to improve, survey results from Westpac showed on Tuesday.
The Westpac-Melbourne Institute Consumer Sentiment Index declined 0.7 percent to 92.1 in January from 92.8 in December.
Among five sub-indices of consumer confidence, the two indicators tracking current conditions declined, while the forward-looking ones were flat or increasing in January.
Consumers’ assessment of their finances compared with a year ago reversed the gains in December, falling 7.8 percent to 77.7.
Forward-looking measures were more stable in January. Consumers’ assessment of whether now is a good ‘time to buy a major household item’ registered the fastest growth of 1.8 percent, to hit 90.8.
Views about the economy in five years’ time improved a little, up 0.7 percent to 96.6 in January.
The ‘family finances next 12mths’ rose 1.1 percent to 104.4. Meanwhile, the assessment about economic conditions in next twelve months remained unchanged at 91.2.
The ‘time to buy a dwelling’ index improved across all state and regional breakdowns. The corresponding index climbed 10.2 percent to 89.9.
The Westpac-Melbourne Institute Mortgage Rate Expectations Index, which tracks consumer expectations for variable mortgage rates over the next twelve months, ticked down to 105.7 in January from 105.8 in December.
Consumers continue to scale back their views about the outlook for house prices. Nationally, the Westpac-Melbourne Institute Index of House Price Expectations plunged 5.9 percent to 134 in January, more than 15 percent below the last year’s level and a touch below the longer-run average.
Further, the survey showed that unemployment expectations worsened in January. The Westpac- Melbourne Institute Unemployment Expectations Index rose 2.8 percent to 127.2 in January.
“The consumer mood has soured for two months in a row and remains on the pessimistic side,” Westpac Group Chief Economist Luci Ellis said. “However… consumers expect things to continue to improve from here,” Ellis added.
Westpac expects the Reserve Bank to leave interest rates unchanged at its February meeting, with an easing expected to commence in May.
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