REPEAT: MNI ANALYSIS: Australia Nov Consumer Morale Falls Back

Repeats Story Initially Transmitted at 23:34 GMT Nov 14/18:34 EST Nov 14

--Christmas Spending Outlook No Better Than Last Year's Lacklustre Result

     SYDNEY (MNI) - The Westpac-Melbourne Institute's monthly consumer sentiment

survey fell in November below the 100.0 mark, after rising just above that level

in October for the first time in a year.

     The Westpac-MI consumer sentiment index fell 1.7% m/m to 99.7, after rising

to 101.4 in October. 

     Economic uncertainty was the main cause the fall in November sentiment,

with views on both economic conditions in the next 12 months and in the next

five years declining. The view on "finances versus a year ago" rose slightly but

remained at a weak level and sentiment on "time to buy a major household item"

fell 3.3%.

     These views suggest consumers are unlikely to increase their spending any

time soon, posing a major headwind for the economy's growth prospects.

     Significantly, house price expectations fell to the lowest level since

June, while confidence among mortgage-holders declined more than non-mortgage

holders, suggesting media coverage around the prospects of rising interest rates

may be unnerving households. Both are likely to be important additional factors 

weighing on households' spending decisions.

     The latest survey had an additional question on consumers' Christmas

spending decisions. Just under a third of Australians expect to spend less on

gifts this year than last, with 54% expecting to spend about the same and just

11% spending more -- the latter the lowest proportion since Westpac began

running this question in 2009. 

     "Overall the net balance of 'more minus less' is marginally more negative

than last year, suggesting we're in for a repeat of last year's lacklustre

Christmas spend," Westpac chief economist Bill Evans wrote in a note. 

     Commenting on the RBA's monetary policy, Evans said his interpretation of

the updated forecasts in the central bank's Statement on Monetary Policy

released last Friday is that whereas in August the RBA expected to be raising

rates some time in 2018, that prospect is now much less clear. "In fact, if

their lower inflation forecasts prove correct the Bank is unlikely to move in

2018," he said. 

     From Westpac-Melbourne Institute Index of Consumer Sentiment for November

published Wednesday:

                                        November  October

---------------------------------------------------------

Sentiment Index                             99.7    101.4

Current-Conditions Index                   101.8    103.3

Expectations Index                         100.1    100.1

Family Finances Vs Year Ago                 84.8     83.7

Family Finances Next 12 Months             105.4    102.4

Economic Conditions Next 12 Months          96.2    102.6

Economic Conditions Next 5 Years            93.2     95.2

Good Time to Buy Major Household Items     118.8    122.8

--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com

[TOPICS: MTABLE]