Australian consumer sentiment has fallen to a level on par with the lows of the COVID-19 pandemic and the Global Financial Crisis, according to the findings from Westpac’s monthly index.

The monthly Consumer Sentiment Index fell 3 per cent in August, from 83.8 in July to 81.2. This marks a cumulative decrease of 22.9 per cent since a recent peak in November 2021.

Not surprisingly, inflation plays an outsized role in these findings. 58 per cent of respondents still expect the cash to increase by 1 per cent or more over the next year, following the 0.5 per cent increase last week.

The outlook of the economy over the next 12 months has fallen 31 per cent since November, while “whether now is a good time to buy a major household item” has fallen 27 per cent.

“A strong message from the collapse in the Index over the last nine months has been the negative attitude to major household purchases, where confidence has fallen almost as fast as the 12 month economic outlook,” Westpac’s chief economist Bill Evans said.

“It seems likely that inflation, which we still see as the major negative for confidence over this period has been weighing particularly heavily on the attractiveness of consumer durables.”

Despite warning “this reading is on a par with the lows of the Covid and Global Financial Crisis”, Evans notes it is “still well above the lows during the late 80/s/ early 90’s recession.”