Australia: Consumer sentiment lifts - Westpac

The Westpac Melbourne Institute Index of Consumer Sentiment for Australia rose 3.6% to 101.4 in October from 97.9 in September, notes Bill Evans, Chief Economist at Westpac.

Key Quotes

“This is the first time since November last year that optimists have outnumbered pessimists and represents the highest level of the Index since October last year.”

“Consistent reports of an improving global economy may have been a factor behind this lift in confidence. It is also likely that concerns about rising interest rates associated with overheated housing markets have eased.”

“Ongoing improvements in the labour market are also boosting confidence. Confidence showed stronger gains amongst those employed as tradies, ‘paraprofessionals’ (typically in the health and education sectors), or labourers. The rise in confidence was particularly strong for ‘trade’ workers, up 22% in the month, suggesting the continued strength in residential building was a positive factor.”

“However, confidence is still not particularly strong, with views on family finances a clear weak spot. Whereas the overall Index is down 1% on a year ago respondents’ assessments of their own finances relative to a year ago have fallen by 6.1% and the outlook for finances over the next 12 months is down by 2.6%. Offsetting that ongoing weakness in respondents’ assessments of their own finances is a lift in the 12 month economic outlook of 6.9% relative to last October.”