Australian consumer sentiment jumps to 11-year high in April

[SYDNEY] A measure of Australian consumer sentiment surged to an 11-year peak in April as strength in family finances and optimism on the economy easily outweighed an unwelcome faltering in the roll out of Covid-19 vaccines.

The Westpac-Melbourne Institute index of consumer sentiment released on Wednesday jumped 6.2 per cent in April, the third straight month of gains.

That left the index up a huge 57 per cent on April last year when coronavirus lockdowns sent confidence crashing. The index reading of 118.8 was the highest since August 2010 and showed optimists now far outnumbered pessimists.

"This is an extraordinary result," said Westpac chief economist Bill Evans. "The survey continues to signal that the consumer will be the key driver of above-trend growth in 2021."

Mr Evans said he had thought the index might decline given some government support measures ended in March and the government was struggling with its vaccine rollout.

Instead, consumers proved resilient with the survey measure of family finances compared with a year ago up 13.4 per cent and the index for finances over the next 12 months rising 5.4 per cent.

The outlook for the economy over the next 12 months climbed 10.3 per cent, while that for the next five years rose 4.1 per cent.

The only dip came in a measure of whether it was a good time to buy a major household item which eased 0.2 per cent, after jumping in March.

The housing market remained a hot topic with the survey's index of house price expectations rising 2.7 per cent in April, to be 8 per cent above its pre-pandemic levels.

However, that surge was making housing progressively less affordable with the measure of whether it was the right time to buy a dwelling falling a sharp 7.9 per cent in April.

REUTERS