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Australia consumer sentiment slips in Jan: survey

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A measure of Australian consumer sentiment slipped in January as sharp losses on financial markets and anxiety over China's outlook dominated headlines and darkened the public mood.

[SYDNEY] A measure of Australian consumer sentiment slipped in January as sharp losses on financial markets and anxiety over China's outlook dominated headlines and darkened the public mood.

The survey of 1,200 people by the Melbourne Institute and Westpac Bank showed its index of consumer sentiment slipped a seasonally adjusted 3.5 per cent in January, from December when it eased 0.8 per cent.

The index reading of 97.3 was still 4.3 per cent higher than a year ago, though pessimists now slightly outnumbered optimists. "With limited domestic news during the holiday season consumers appear to have been mainly impacted by the spate of negative news on the international front and the spillover effect on financial markets," said Westpac Chief Economist Bill Evans.

Over the two weeks to the end of the survey, oil prices fell by 20 per cent and the Australian share market by 7.6 per cent.

The biggest impact was on the index of family finances compared to a year ago, which slid 9.4 per cent. The outlook for finances over the next 12 months eased 2.3 per cent.

The survey's measure of economic conditions for the next 12 months fell 5.0 per cent, though confidence in the economy over the next 5 years actually edged up 0.3 per cent, and was almost 12 per cent higher on a year ago.

The index of whether it was a good time to buy a major household item dipped 1.7 per cent in the month.

Yet there was also a hefty 13.9 per cent increase in the'time to buy a dwelling' index to 113.0 in January, the highest reading since May last year.

The Reserve Bank of Australia (RBA) cited improving indicators of business and consumer confidence when it skipped a chance to cut interest rates last month.

REUTERS