Australian consumer confidence dipped again in November after seeing a rise in the month prior.
The Westpac-Melbourne Institute consumer sentiment survey recorded a 1.7% fall to 99.7.
A reading of 100 is deemed neutral, meaning that the number of optimists and pessimists are the same. Any reading below 100 indicates that there are more of the latter.
“The survey results show that the decline in the Index in November was mainly attributable to the declines in the component indexes relating to future economic conditions,” Westpac said.
Views toward economic conditions over the next 12 months fell by 6.2%, while the sub-index for the five-year outlook fell by 2.2%.
According to Westpac Chief Economist Bill Evans, the downward revisions toward economic sentiment were likely caused by uncertainty stemming from the citizenship crisis in Federal parliament.
In addition, “constant media coverage around the prospect of rising interest rates may be unnerving households. The confidence of respondents who hold a mortgage fell by 4.5% compared to a more modest fall of 1.4% for those owners who are mortgage free and a 0.5% increase for tenants,” Evans said.
Below is a summary of the changes for each of the main components of the survey:
The latest figures indicate that one of the key recent themes in the Australian economy remains in place — the increasingly wide gap between business conditions and consumer confidence.
This morning’s data follows yet another bumper result in the NAB business survey yesterday, driven by a sharp rise in trading and profitability.
Despite the slight downturn, consumer confidence has still risen in the second half of the year from the low of 95.5 reached in August.
“The November survey offers a critical read in the lead-in to the Christmas spending period. Aside from the downbeat headline, responses to our annual question on Christmas spending plans also point to moderate activity,” Evans said.
“The state responses show consumers in Victoria and NSW are a little less inclined to restrain spending while those in SA and WA are tilting more towards cut backs.”
And while those surveyed has a noticeably dimmer about about the broader economy, there was still a tone of positivity from households about their financial position over the next 12 months.
The sub-index for family finances compared to a year ago also edged higher in November, although it remains lower than the same time last year.
As usual, the breakdown by demographics revealed some interesting trends. Households earning between $60-$80,000 reported the sharpest fall in sentiment from the prior month, with a reading of 92.2 compared to 107.6 in October.
Those who said they intended to vote for the Coalition maintained a broadly optimistic view, with the sub-index increasing to a reading 115.0 from 110.7.
Labor voters dipped back into negative territory in November with a reading of 98.2, after optimistic Laboor voters outnumbered pessimists in the prior month at a reading of 102.6.
Broken down by gender, male respondents recorded a net-positive reading of 101.9 (down from 106.7) while the index for females surveyed showed a reading of 97.5 (up from 96.3 in October).
“Overall, the consumer mood has been downbeat in 2017 with clear pressures on family finances and an uncertain economic outlook weighing on sentiment,” Evans said.
Factoring in the Reserve Bank’s downward revisions to inflation in last Friday’s Statement on Monetary Policy, Westpac is sticking to its view that interest rates will stay on hold for the forseeable future.
“We are maintaining our long held view that rates will remain on hold through 2018”, Evans said.