Australia consumer sentiment rebounds in Feb: survey

[SYDNEY] A measure of Australian consumer sentiment rebounded strongly in February as people became more upbeat about their own finances even as turmoil gripped financial markets abroad.

The survey of 1,200 people by the Melbourne Institute and Westpac Bank showed its index of consumer sentiment jumped a seasonally adjusted 4.2 per cent in February, recovering all of January's 3.5 per cent drop.

The index reading of 101.1 was 0.6 per cent higher than a year ago, with optimists again outnumbering pessimists.

The surprising strength of the survey should be welcome to the Reserve Bank of Australia which has been concerned that volatility in global markets could sap confidence and thus consumer spending. "The resilience of sentiment, and in particular, respondents'assessments of their own financial position are not pointing to a significant deterioration in domestic demand," said Westpac Chief Economist Bill Evans.

The index of family finances compared to a year ago surged 11.3 per cent in February, more than making up for a 9.4 per cent dive the previous month.

Evans said it was possible the pick up reflected falls in petrol costs, with average pump prices having fallen 8.5 per cent since the January survey.

The outlook for finances over the next 12 months also improved by 3.8 per cent.

The only softness was in the survey's measure of economic conditions for the next 12 months, which dipped 0.8 per cent. Yet confidence in the economy over the next 5 years rose 4.0 per cent.

In a promising sign for retailers, the index of whether it was a good time to buy a major household item also climbed 3.1 per cent.

REUTERS