Consumer confidence slides in the wake of concerns about the economy but there was a boost for retailers with buyer sentiment starting to recover.
The Westpac-Melbourne Institute Consumer Sentiment Index dipped 2% in December chiefly around inflation and an unsettled global backdrop.
Westpac head of Australian macro-forecasting, Matthew Hassan said while the consumer mood has improved materially over 2024 it remains pessimistic overall. “Consumers continue to report solid improvements in ‘current conditions,’ but the latest month has seen this more than offset by a loss of confidence around the outlook, particularly for the economy,” he said.
However, there were promising signs with the ‘time to buy a major household item’ sub-index rising 4.8%, a two and a half year high, with intentions amongst those earning between $60,000 and $100,000 a year, both up 20 to 25% in the latest month.
The housing index receded, falling 6% in December with Victoria and NSW more settled, although there were some volatile swings with a sharp rebound in Western Australia and big falls in Queensland and South Australia.
This unsettled picture suggests there is a higher-than-normal degree of uncertainty about the outlook for housing, particularly in markets that are still seeing strong price growth.
“Westpac expects the board to leave interest rates unchanged at its February meeting, with an easing expected to commence in May,” Hassan said.