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Free AccessREPEAT: MNI DATA: Australia Sentiment Dn But Budget Well-Recd
Repeats Story Initially Transmitted at 00:36 GMT May 16/20:36 EST May 15
--Westpac-MI Consumer Sentiment -0.6% m/m in April to 101.8
By Sophia Rodrigues
SYDNEY (MNI) - The Westpac-Melbourne Institute's consumer sentiment index
fell in May as a positive boost to confidence from the federal budget was offset
by other factors like rise in fuel prices, weaker house prices and weaker
exchange rate.
The survey shows the responses to the budget was the best since 2010 when
Westpac began asking additional questions about the budget in the survey. So it
is likely that sentiment may improve next month.
Data published by Westpac-Melbourne Institute Wednesday showed consumer
sentiment fell 0.6% m/m in May to 101.8. The survey was taken during the period
May 7 to 12 (federal budget was released on May 8). The sentiment index based on
responses collected pre-budget was 99.9 while post-budget index was firm at
104.8. The post-budget turnaround was most positive since Westpac began tracking
sub-samples in 2011.
The survey showed responses related to the budget was relatively
well-received. Even though the overall balance was still negative (-10%), it was
much less negative versus last year, and it was the best since Westpac began
running question on budget in 2010.
The main positive in the survey was view around labor market as
unemployment expectations fell to a seven-year low. But offsetting this were
deteriorating views on own finances, and on housing market.
Consumers' assessment of current finances dropped 6.5% to 83.0 -- the
lowest level since September last year and 7.3% below the long run average. The
result indicated respondents expect tax cuts to be positive for the economy but
have limited significant for their financial position.
Views around housing fell further in May. The "time to buy a dwelling"
index fell 2.8% to 101.1, a six-month low and well below the long-run average of
120. House price expectations declined 0.5% to 129.4, down 13.6% from the recent
peak in February last year, though still slightly above long-run average of
127.5. Significantly, expectations remain notably weaker in New South Wales at
120.6.
Even as views on finances and housing deteriorated, consumer became more
confident about labor market conditions. The Westpac Melbourne Institute
Unemployment Expectations Index, which can be viewed as a measure of consumers'
sense of job security, dropped 4.5% to 120.0 in May, a seven year low (recall
that lower reads mean fewer consumers expect unemployment to rise in the year
ahead).
From Westpac-Melbourne Institute Index of Consumer Sentiment for May
published Wednesday:
May April
----------------------------------------------------
Sentiment Index 101.8 102.4
Current-Conditions Index 102.1 104.9
Expectations Index 101.6 100.7
Family Finances Vs Year Ago 83.0 88.8
Family Finances Next 12 Months 102.1 101.6
Economic Conditions Next 12 Months 104.5 101.0
Economic Conditions Next 5 Years 98.1 99.5
Good Time to Buy Major Household Items 121.2 121.0
--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com
[TOPICS: MTABLE]
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.