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Westpac-MI sentiment rises in July despite ongoing pessimism
The survey index remains in the bottom decile at 83.9, signaling deep pessimism even as lower fuel prices improved perceptions of household finances.
Westpac–MI Consumer Sentiment Index rose 4.1% in July, but the reading of 83.9 still sits in the bottom decile of historical outcomes, underscoring persistent pessimism, Action Forex said. The report attributed some improvement to lower fuel prices, which helped lessen the negative assessment of family finances versus a year ago, and also improved views for the next 12 months. Still, consumers stayed sensitive to developments in the Middle East, with the survey noting that the conflict’s re-escalation coincided with progressively worse day to day responses while the fieldwork was underway. According to Action Forex, sub-indexes for the economic outlook were weak and only marginally higher in July, with one and five years ahead rising 0.6% and 0.7% respectively. Concerns about jobs outlook eased, and expectations for rising mortgage rates over the next year moderated, with the share dropping from 66% to 60%, alongside more respondents reporting uncertainty about the path of rates. The same weekly commentary pointed to a NAB business survey echoing similar themes. Business confidence rose 9 points to a less pessimistic reading of -5, aided by lower fuel prices that reduced purchase and final prices, while the cumulative effect of pressures was still weighing on capital expenditure plans and labor demand, Action Forex added.