Westpac’s excellent monthly RedBook is a very detailed look into the data that sits behind the Westpac-MI consumer sentiment survey.
It’s a deep dive into everything related to consumers and their mood. Unfortunately, it’s a deep dive into a cold bath if you are an Australian retailer.
Here’s what Westpac said about the outlook overall: “Compared to last year, this year’s survey is showing much weaker reads for both headline consumer sentiment and our CSI composite” [an alternative measure based on components of the survey with a closer link with spending].
Westpac says that while the lead-in is not as bad as 2008 “it is comparable to 2011 with a clearer intention to economise on gifts.”
Overall spending intentions are off 4.5% from last year, but crucially – given the RBA last week hung its hat on Sydney property as a support for growth – is the fact that NSW is 6.7 points and Victoria 4.5 points. That can’t be a good sign as we head into 2015.
Showing the impact that debt is having on the Australian consumer psyche Westpac says that “Despite interest rates at historic lows and a buoyant housing market, homeowners are significantly more downbeat about Christmas spending, particularly those with a mortgage. In contrast, renters are less inclined to cut spending than they were last year.”
But Westpac hasn’t given up all hope noting that the devil in the detail of the survey suggests that the outcome could be better than the aggregate data suggests. This is particularly the case for those with incomes over $100,000.