Matthew Hassan
The Westpac Melbourne Institute Consumer Sentiment Index rose 6.2% to 86 in February, from 81 in January.
This is the biggest monthly gain since April last year, when the RBA paused its rapid series of interest rate rises, and takes the Index to its highest level since June 2022.
Westpac Senior Economist Matthew Hassan said: “While sentiment is still firmly pessimistic, there finally looks to be some light at the end of the tunnel for Australian consumers. Moderating inflation and shifting expectations for interest rates appear to be the main factors behind the lift, with some additional support coming from the prospect of broader income tax cuts later in the year. That said, responses over the course of the survey week suggest the rally is still very tentative with a sharp pull-back amongst those surveyed after the RBA’s February policy decision.
“All five component sub-indexes recorded gains in February, led by big improvements in buyer sentiment and expectations for the economy over the year ahead.
“The ‘time to buy a major household item’ sub-index surged 11.3% to 86.8. This sub-index has been the main one to capture the impact of intense cost-of-living pressures over the last two years, with six of the weakest monthly reads on record. While the sub-index remains a long way below its historical average of 124.7, the February gain is the most promising sign yet that these pressures are finally starting to ease.”
You must be logged in to post or view comments.