SYDNEY, March 14 (Reuters) - Australian consumer
sentiment stayed stuck at historically depressed levels in March
amid concerns over inflation and interest rates, a survey showed
on Tuesday, with the appetite for buying big-ticket items
especially weak.
The Westpac-Melbourne Institute index of consumer sentiment
was unchanged in March, following a dive of 6.9% the month
before. The index reading of 78.5 meant pessimists greatly
outnumber optimists.
"Index reads below 80 are rare, back-to-back reads even
rarer," noted Westpac chief economist Bill Evans. "Both the
COVID shock and the Global Financial Crisis saw only one month
of sentiment at these levels."
The result was echoed by a weekly survey from ANZ which
showed a 2.9% drop to the lowest since April 2020, when the
pandemic closed much of the country.
Both found mortgage holders and tenants were particularly
gloomy after the Reserve Bank of Australia (RBA) lifted its cash
rate a quarter point to 3.60% on March 7.
Markets had thought another two rate hikes were possible,
until turmoil in the U.S. banking sector radically altered
thinking on policy tightening world wide.
Now, swaps and futures imply only a minor chance
the RBA will lift rates at its April meeting and could, in fact,
be done tightening altogether. The impact of higher borrowing costs on household budgets
was already clear with the Westpac measure of whether it was a
good time to buy a major household item sliding 4% to the lowest
in over a decade.
The index of the economic outlook for the next 12 months
dropped 2.3%, though the outlook for the next five years did
bounce 5.6%.
The survey's measure of family finances compared with a year
ago edged up 2.2% after diving in February, while the outlook
for finances over the next 12 months fell 1.8%.
(Reporting by Wayne Cole; Editing by Lincoln Feast.)
Messaging: wayne.cole.thomsonreuters.com@reuters.net))
