Australia: Consumer sentiment shows the Budget has been well received - Westpac

Bill Evans, analyst at Westpac, notes that the Australia’s Westpac-Melbourne Institute Index of Consumer Sentiment rose 1.9% to 100.7 in April from 98.8 in March.

Key Quotes

“While the month to month rise in sentiment is fairly muted, the survey detail suggests the Budget was well-received. Sentiment over the course of the week showed a clear boost, with sentiment amongst those surveyed post-Budget 7.7% higher than sentiment amongst those surveyed pre-budget – the most positive turnaround since we began tracking pre and post Budget responses in 2011.”

“The key issue will be whether this boost from the Budget is sustained. Certainly the ‘pre Budget’ print of 96.8 showed a further deterioration in sentiment from the previous print of 98.8, despite what was already quite a sharp 4.8% fall in March.”

“Persistent weak wages growth; falling house prices; and the perceived rising cost of living are all weighing on consumers. This is best captured in the component of the Index – ‘family finances compared to a year ago’ – which declined 4.9% in April (showing little movement between pre and post Budget responses) and is down 9.6% on a year ago. That compares to the headline Index which is only down by 1.6% over the same period.”