Australian consumers find fresh worries as lockdowns lift

[SYDNEY] A measure of Australian consumer sentiment eased back in early October as worries about the longer-term outlook for the economy overshadowed relief at the imminent loosening of coronavirus restrictions.

The Westpac-Melbourne Institute index of consumer sentiment released on Wednesday fell 1.5 per cent in October, reversing much of September's 2.0 per cent bounce.

The index reading was down 0.4 per cent on October last year, though at 104.6 it meant optimists still outnumbered pessimists.

The dip was something of a disappointment given the survey was taken just before New South Wales was set to ease lockdown restrictions, with Victoria and Canberra to follow soon after.

Westpac chief economist Bill Evans noted sentiment had improved in Sydney and Melbourne but fell sharply outside those cities as respondents fretted that the resumption of inter-state travel could bring more infections to the regions.

Consumers were also less upbeat on the economy with the measure of the outlook for the next 12 months falling 1.75, while that for the next five years dropped 5.6 per cent.

The measure of family finances compared with a year ago fell 1.3 per cent, while that for finances over the next 12 months edged up 0.5 per cent.

The index of whether it was a good time to buy a major household item added 0.9 per cent, but was still down 3.3 per cent on a year ago.

The mood on the housing market took a turn for the worse with the time to buy a dwelling measure sliding 13.8 per cent in October, after a bounce the month before.

"The fall is almost certainly due to the sharp deterioration in affordability over the last year, dwelling prices having surged 20 per cent nationally over that time," said Evans.

Indeed, the survey's measure of house price expectations remained near eight-year highs, suggesting consumers saw no end to the boom as yet.

REUTERS