Matthew Hassan, analyst at Westpac, points out that the Australia’s Westpac-Melbourne Institute Index of Consumer Sentiment fell 4.8% to 98.8 in March from 103.8 in February.
Key Quotes
“The consumer mood deteriorated in March, sentiment falling to its lowest level since September 2017. With the index moving back below 100, pessimists again outnumber optimists. That contrasts with the ‘cautiously optimistic’ reads that prevailed throughout 2018 although at 98.8 the index is only ‘cautiously pessimistic’ and still above the average level recorded in 2017.”
“The main development over the last month was the December quarter national accounts update that showed Australia’s economic growth slowing to a 1% annual pace over the second half of 2018, widely described as a ‘per capita recession’ in media coverage.”
“All index components recorded falls in March but the biggest shift was in consumers’ near term expectations for the economy. The ‘economic outlook, next 12 months’ sub-index fell 6.9%, following a 7% gain in February and a 7.8% drop in January. The ‘economic outlook, next 5 years’ sub-index also fell 5.5%, with a similar choppy profile over the previous two months. With the December quarter national accounts likely clarifying what were previously somewhat mixed signals about the extent of Australia’s growth slowdown, the March weakening in consumer expectations for the economy looks likely to be sustained.”
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