This morning the Westpac-MI consumer sentiment survey for January will be released, a closely watched report that reveals expectations for the economy, consumer spending, labour market conditions and house prices in the months ahead.
Here’s the state of play.
- The survey is based upon responses from 1,200 adults across Australia and is generally conducted the week prior to the results being released.
- A reading of 100 is deemed neutral, meaning the number of optimists and pessimists is equal. A figure above 100 indicates optimists outnumber pessimists while a figure below 100 suggests pessimists outnumber optimists.
- In December, the survey’s sentiment index slipped 0.8% to 100.8. Despite the small decline, sentiment was 10.7% higher than the levels of a year earlier.
- All of the weakness was due to economic sentiment deteriorating sharply over the month. The gauge looking five years ahead fell 11.3%, near triple the 4.2% decline registered in the gauge looking one year ahead.
- In contrast, gauges on family finances, both looking back a year and in the year ahead, rose strongly, adding 5.5% and 5.8% respectively.
- Outside of the main survey components, expectations for unemployment deteriorated modestly with the survey’s unemployment expectations index gaining 1.7%. A higher reading suggests confidence in the labour market is weakening.
- Fitting with the recent trend in the broader residential property market, the index tracking assessments of whether now was a ‘time to buy a dwelling’ fell by a further 3.4% to 99.5.
- The decline in buying sentiment was mirrored in the separate house price expectations index which fell 9.4%.
- Over the past two weeks, the separate ANZ-Roy Morgan consumer confidence survey has fallen, indicating that there may be downside risks to the January report.
The report will be released at 10.30am AEDT.
Business Insider will have full coverage as soon as the data drops.