Consumer confidence about the economic outlook has fallen to its lowest level since 1993, according to a new survey released today.
The Westpac/Melbourne Institute Consumer Sentiment index fell 1.3% in April and has fallen by 21.2% in the last three months, the sharpest quarterly fall in the index’s 23 year history.
Consumers have become particularly negative about plans to make major household purchases, with the index measuring a 12.7% fall in sentiment in that area.
And while rising interest rates are clearly a factor in falling confidence, renters are particularly gloomy about the outlook, with confidence down 9.3% among tenants compared to just 0.1% among those with home loans.
Westpac chief economist Bill Evans says while the result is consistent with recent data showing falling retail sales, the Reserve Bank of Australia will need to see more substantial evidence of a slowing economy before any rate cut will be considered.
“We expect interest rates will remain around these current highs for some time until the
Reserve Bank becomes convinced that inflation is back under control,“ Evans says.
But while Australian consumers are spending less, it seems overseas travellers haven’t pulled their heads in too much, with short term overseas visitor numbers lifting 1.3% seasonally adjusted in February to 472,400.
On the markets today, the S&P/ASX200 is trading down 0.4% on yesterday’s close to 5546.8 at 12.38pm, with the poor performance of financial stocks once again the dominant message from the morning’s trading.