Following the disappointing NAB business survey released yesterday, Australia’s household sector will be in focus today with the release of the Westpac-MI consumer sentiment report for August.
Here’s the state of play.
- The survey is based upon responses from 1,200 adults across Australia. It is generally conducted the week prior to the results being released.
- In July consumer sentiment fell 3.2% to 92.2, leaving the index at the lowest level since December 2014.
- A reading of 100 is deemed neutral, meaning the number of optimists compared to pessimists is equal. A figure above 100 indicates optimists outnumber pessimists while a figure below 100 suggests pessimists outnumber optimists.
- Apart from a brief soiree when the index ticked above 100 in February this year, pessimists have outnumbered optimists in 16 of the past 17 months.
- The index has fallen in four of the past five months, including the past two.
- Confidence has not fallen for more than two consecutive months since March 2014.
- In July expectations for the economy – both in the year ahead and looking out five years – tanked. The former fell by 10.5% with the latter dropping 4.4%.
The gauge on family finances compared to a year earlier also deteriorated, falling 10.4%. Despite subdued expectations for the economy, the outlook for family finances in the year ahead jumped 6.9%.
- Interestingly, despite respondents expressing the view house prices will continue to push higher, the index tracking whether now was a good time to buy a dwelling slumped 16.7%, leaving the gauge at lows last seen in June 2010.
- In the wake of recent announcements from Australian banks in relation to investor lending, it will be interesting to see whether this momentum was maintained in August.
The survey will be released at 10.30am AEST. Business Insider will have full coverage as soon as the data drops.