Confidence among Australian consumers worsened further in August amid surging inflation and interest rate hikes, survey data from Westpac showed on Tuesday.
The Westpac-Melbourne Institute Index of Consumer Sentiment fell 3.0 percent to 81.2 in August from 83.8 in July.
There has been a cumulative decrease of 22.9 percent since the index reached its high in November 2021, Westpac said.
Further, the latest reading is comparable to the lows of the Covid and the global financial crisis.
The survey was conducted among 1,200 households from August 1 to 4.
Among sub-components, consumers’ opinion regarding the economy‘s outlook for the next 12 months worsened sharply in August, with the sub-index falling by 8.0 percent to 73.9, and that for the next five years dropped only by 1.0 percent to 90.7.
The sub-index reflecting the ‘time to buy a major household item’ dropped heavily by 8.4 percent from the previous month to 81.4 in August.
On the other hand, the index measuring consumers’ financial situation in the next twelve months improved in August. The respective index climbed from 86.2 to 88.2.
The ‘finances vs a year ago’ sub-index registered a milder increase of 0.1 percent.
The labour market’s confidence continues to show gains in August. The index of Unemployment Expectations fell 5.8 percent.
Although overall consumer spending remains buoyant, the housing market continued to show deteriorating trends in August, as the house price expectations index declined by 7.5 percent.
The survey revealed that 58 percent of respondents still expect the central bank to increase the cash rate by 1 percent or more over the next year following the 0.5 percent increase in August.
The Reserve Bank Board next meets on September 6.
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