January Consumer Confidence Plummets
Westpac’s consumer confidence index has plummeted 4.7% to 99.6 in January – notching a 16-month low, and the first sub-100 reading since November 2017.
The ‘cautiously optimistic’ consumer mood which persisted for the majority of 2018 has now slipped into ‘slightly pessimistic’ terrain.
Consumer confidence was hampered by housing declines, disappointing updates on Australian economic growth, and political uncertainty.
As a poor start to the year, January’s decline marks the biggest monthly drop in over three years.
Westpac asserts January’s read must be treated with some caution, as the index requires adjustment from the regular holiday season boost.
Following revision, consumer confidence is still down 5.3% versus the same time last year.
Consumer views regarding family finances has dropped – the ‘finances vs a year ago’ sub-index slipped 5.9%.
The sub-index tracking expectations for ‘finances over the next 12 months’ has also come down 3.1%.
Pressure on family finances remain a pain point for consumer confidence, with both sub-indexes well below long run average levels.
Results are impact by slow wage growth, and falling house prices.
Consumer attitudes to major purchases are comparatively more resilient, with the ‘time to buy a major household item’ sub-index dipping 1.3%.
Despite this, the index remains below average, with weak family finance sentiment set to continue sluggish consumer spending growth.
Westpac asserts the Australian cricket team’s first domestic test series defeat to India also weighed negatively on sentiment.