REPEAT:MNI Data: Australia Sentiment Stable Despite Headwinds

Repeats Story Initially Transmitted at 00:50 GMT Apr 11/20:50 EST Apr 10

--Westpac-MI Consumer Sentiment -0.6% m/m in April to 102.4

By Sophia Rodrigues

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

appears to be defying recent confidence-denting developments and remains in the

optimistic territory, thus signalling a positive outlook for household

consumption and thus the continuation of the Reserve Bank of Australia's hawkish

stance.

     Data published by Westpac-Melbourne Institute Wednesday showed consumer

sentiment fell just 0.6% m/m in April to 102.4. The outcome is surprising given

there were three clear negatives that could have potentially pulled down

sentiment into the pessimistic zone. Those related to the weakness in the local

share market, the deterioration in the U.S. China trade relations and further

weakness in housing market activity.

     With the latest outcome, sentiment has remained above 100 for five straight

months. While this is still well below levels of 105-115 that are associated

with a robust consumer, the fact that it has held up despite headwinds is a good

sign for household consumption outlook.

     The details in the survey point to a consumer that doesn't appear to be

worried about negative newsflow. For example, the economic outlook sub-index for

both 12 months ahead and the next five years rose in April despite news on

global trade tensions and the risk it poses for the Australian economy. One

negative was news recall on international conditions which was significantly

more negative than in December.

     Consumers also appear to be dismissing more negative news around housing

market with overall indicators related to housing little-changed versus March.

The detail were mixed though, with the "time to buy a dwelling" index at 104.0,

well below the long-run average of 120 and considerably weaker for Sydney (92)

and Melbourne (93). On the other hand, the index was well above the levels seen

in 2017 and the index on house price expectations rose 0.4% to 130.0, above

long-run average of 127.5.

     The biggest disappointment in the latest survey was on view on finances for

the next 12 months which fell 5.8%, and was the lowest since September last

year. This was likely a reflection of share market volatility and housing market

weakness, though some offset came from improvement in views on finances versus a

year ago.

     One indicator to watch is "time to buy a major item" which declined 1.8% to

121 to a five-month low and well below the long-run average of 127.5. If this

sub-index continues to weaken, it wouldn't bode well for outlook for household

consumption.

     From Westpac-Melbourne Institute Index of Consumer Sentiment for April

published Wednesday:

                                        April  March

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

Sentiment Index                         102.4  103.0

Current-Conditions Index                104.9  104.9

Expectations Index                      100.7  101.7

Family Finances Vs Year Ago              88.8   86.6

Family Finances Next 12 Months          101.6  107.9

Economic Conditions Next 12 Months      101.0  100.4

Economic Conditions Next 5 Years         99.5   96.7

Good Time to Buy Major Household Items  121.0  123.2

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

[TOPICS: MTABLE]