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Table 1: Consumer Sentiment Index Sep 2011 Seasonally Adjusted* Trend** 96.9 94.6 Sep 2012 98.2 98.0 Aug 2013 105.7 106.1 Sep 2013 110.6 108.2 % change on % change on Aug-2013 4.7 1.9 Sep-2012 12.7 10.4
The Westpac Melbourne Institute Consumer Sentiment Index rose by 4.7 per cent to 110.6 in September, following a rise of 3.5 per cent in August. This is now the highest reading since December 2010 Four of the five component indices rose in September (see Table 2). The largest increase of 8.7 per cent was recorded by the component index reflecting economic conditions next 12 months, followed by an increase of 7.1 per cent in the component index about economic conditions next 5 years. The component indices about good or bad time to buy major household items and about family finances next 12 months, respectively, rose by 6.9 per cent and 1.6 per cent. On the other hand, the component index about family finances fell by 1.9 per cent. Overall, the current conditions index increased by 3.2 per cent, and the expectations index rose by 5.7 per cent. Increases in consumer sentiment were recorded in most groups disaggregated by demographic characteristics (see Table 3). The biggest increment was reported by the group voting for the Coalition, while the largest fall was observed in the group voting for the Australian Labor party. This months survey was conducted in the week where consumers heard news about the RBA maintaining the official cash rate at 2.5 per cent, and news about a 0.6 per cent GDP growth in the June quarter 2013. Economic conditions was the top news recalled in the September quarter. News about interest rates and Australian dollar was the only favourable news in the September quarter; news about international conditions was the most unfavourable (see Table 5)
Chart 1: Consumer Sentiment Index Chart 2: Current Conditions Index minus Expectations Index***
130
Index
20
Index
10 110 0 90 -10 SA SA 70 Sep-07 Sep-08 Trend Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 -20 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Trend
_________________________________________________________________________________________________________
**Trend for the latest month is based on 2-month moving average while the rest are based on 3-month centred moving average. ***The difference between these two indices provides an indication of consumers perception of the state of the economy now and in the future. A positive (negative) value implies that consumers view current conditions more (less) favorably compared to the future. The University of Melbourne, Melbourne Institute of Applied Economic and Social Research Page 1
Table 2: Consumer Sentiment Index component questions (SA) Sep 2011 Family finances vs a year ago Family finances next 12 months Economic conditions next 12 months Economic conditions next 5 years Good or bad time to buy major hhold items Current Conditions Index* Expectations Index** 79.8 95.3 85.4 92.2 131.8 105.8 91.0 Sep 2012 78.4 96.2 93.3 98.1 124.9 101.7 95.9 Aug 2013 88.8 113.0 100.3 102.5 123.9 106.3 105.2 Sep 2013 87.1 114.8 109.0 109.8 132.5 109.8 111.2 % change on Aug-2013 -1.9 1.6 8.7 7.1 6.9 3.2 5.7 % change on Sep-2012 11.0 19.4 16.8 12.0 6.1 8.0 16.0
Percentage who reported that they were optimistic minus the percentage who reported that they were pessimistic plus 100. *Average of the two component indices that relate to current conditions. **Average of the three component indices that relate to expected conditions. Table 3: Consumer Sentiment Index by demographic characteristics Sep 2011 Gender Male Female By age 18-24 25-44 Over 45 By home ownership Tenant Mortgager Wholly owned By Fed. voting intention Coalition ALP By occupation Manager/prof. Paraprof./trades Sales/clerical Lab./operator Not working By household income p.a. Up to $20K $20 to $40K $40 to $60K $60 to $80K $80 to $100K Over $100K By area Metropolitan Non- Metro. 100.0 93.9 111.2 98.7 92.3 103.4 95.0 96.4 86.7 116.7 97.9 101.0 99.8 90.9 94.9 84.5 95.0 93.3 106.2 95.6 101.0 99.0 93.6 Sep 2012 101.7 94.7 95.3 105.1 93.1 107.0 98.2 95.5 86.1 121.1 99.7 90.8 102.4 107.9 95.6 90.0 94.4 94.0 103.7 99.1 105.5 103.3 89.5 Aug 2013 108.8 102.7 137.5 107.9 98.8 110.7 106.4 103.8 91.8 126.9 107.5 113.4 117.6 102.5 97.0 92.6 98.2 107.3 100.7 110.5 111.3 108.8 99.2 Sep 2013 115.9 105.5 136.0 103.5 111.6 108.7 109.7 112.6 109.3 113.7 112.0 115.8 107.9 102.1 110.2 103.0 106.3 110.2 118.7 121.5 107.2 112.4 106.4 % change on Aug-2013 6.5 2.7 -1.1 -4.1 12.9 -1.8 3.1 8.5 19.1 -10.3 4.1 2.2 -8.2 -0.4 13.6 11.2 8.2 2.7 17.8 10.0 -3.7 3.3 7.2 % change on Sep-2012 14.0 11.4 42.6 -1.5 19.8 1.5 11.7 17.9 27.0 -6.0 12.3 27.6 5.3 -5.4 15.3 14.4 12.6 17.3 14.4 22.6 1.6 8.8 18.9
The University of Melbourne, Melbourne Institute of Applied Economic and Social Research Page 2
30
20
0.8
100
10 0.4 0
80
-10
% Change in Consumer Sentiment, 1 quarter lead (LHS) Retail Sales Growth, Centred 3 quarters moving averge (RHS)
0.0
-20 Jun-08
Jun-09
Jun-10
Jun-11
Jun-12
-0.4 Jun-13
60 Sep-07
Sep-08
Sep-09
Sep-10
Sep-11
Sep-12
Sep-13
120 120 100 100 80 80 SA 60 Sep-07 Trend Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 40 Sep-07
Sep-08
Sep-08
120
100
100
80
80
60 SA 40 Sep-07 Trend Sep-09 Sep-10 Sep-11 Sep-12 Sep-13
Sep-08
Sep-08
*Source: Original Retail Sales deflated by the Consumer Price Index - ABS Catalogue No. 8501.0, Retail Trade: Australia and ABS Catalogue No. 6401.0, Consumer Price Index: Australia.
The University of Melbourne, Melbourne Institute of Applied Economic and Social Research Page 3
120
120
100
100
80
80
Sep-08
40 Sep-07
Sep-08
120
120
100
100
80
80
60 Less than $20,000 40 Sep-07 Sep-08 Sep-09 $100000+ Sep-10 Sep-11 Sep-12 Sep-13
Sep-09
120
120
100
100
80
80
60 Metro 40 Sep-07 Sep-08 Non metropolitan Sep-09 Sep-10 Sep-11 Sep-12 Sep-13
The University of Melbourne, Melbourne Institute of Applied Economic and Social Research Page 4
Table 4: Time to buy a Dwelling and Car Indices Sep 2011 Time to Buy a Dwelling Index Time to Buy a Car Index
131.9
Sep 2012
127.6
Jun 2013
143.3
Sep 2013
145.0
126.3
126.1
138.4
133.4
Sep-05
Sep-07
Sep-09
Sep-11
Sep-13
Sep-05
Sep-07
Sep-09
Sep-11
Sep-13
Table 5: News Heard Indices by topic News Recall Level** Sep 2012 Politics Budget & Taxation Inflation Employment Interest rates Australian Dollar Economic conditions International conditions 8.1 39.8 15.4 20.6 19.4 6.2 72.8 25.5 Jun 2013 4.4 25.2 9.3 14.4 16.5 11.5 57.8 14.6 Sep 2013 10.0 27.9 11.0 13.6 15.6 6.1 52.5 16.5 Sep 2012 46.1 40.5 39.3 34.2 77.4 80.7 39.6 31.1
News Heard Index*** Jun 2013 69.4 60.3 18.9 12.8 109.1 85.2 33.2 44.9 Sep 2013 73.2 67.0 82.9 59.0 120.8 117.2 59.1 53.4
**Proportion of respondents recalling each news topic. ***Percentage who reported that the news was favourable minus percentage unfavourable plus 100.
The University of Melbourne, Melbourne Institute of Applied Economic and Social Research Page 5
120
Budget & Taxation Inflation Employment Interest rates Australian Dollar Economic conditions International conditions
100 80 60 40 20 Interest rates Inflation Budget & Taxation 0 Sep-05 Sep-06 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13
20
40
60
160
Budget & Taxation Inflation Employment Interest rates Australian Dollar
20
40
60
80
100
Inflation
80
Employment
60
Interest rates Australian Dollar Economic conditions International conditions
20
40
60
The University of Melbourne, Melbourne Institute of Applied Economic and Social Research Page 6
Table 6: Wisest place for savings (per cent of respondents) Sep 2011 Banks Building societies Bonds Shares Real estates Credit union Cash management trust Pay debt Superannuation Spend it Other Don't know Total 37.8 2.6 0.9 7.0 16.8 2.1 1.8 18.7 2.8 4.5 4.6 0.6 100 Sep 2012 39.0 2.8 0.5 5.5 19.8 0.8 0.9 20.4 3.0 3.6 2.5 1.0 100 Jun 2013 34.0 1.6 0.9 8.4 24.6 1.5 2.6 15.7 3.8 4.0 1.7 1.0 100 Sep 2013 29.3 1.1 1.1 8.8 27.5 1.3 1.0 13.8 4.8 5.3 4.9 1.0 100 % change on Jun-2013 -4.6 -0.5 0.2 0.4 2.9 -0.2 -1.7 -2.0 0.9 1.3 3.2 0.0 0 % change on Sep-2012 -9.7 -1.7 0.6 3.3 7.7 0.5 0.1 -6.7 1.8 1.7 2.4 0.0 0
Released: 11 September 2013 Interview period: 2 September 8 September 2012 Sample size: 1200
Coverage: persons 18 years and over, all states and the ACT. Stratified by gender, age and location.
The University of Melbourne, Melbourne Institute of Applied Economic and Social Research Page 7
The Westpac Melbourne Institute Survey of Consumer Sentiment index has been designed as a trend-less variable that provides an indication of the level of and shifts in consumer sentiment over time. The index is an average of five component indexes which in turn reflect the balance of favourable and unfavourable responses to five survey questions. These questions relate to family finances a year ago and in the next 12 months, economic conditions in the next 12 months and next 5 years, and good or bad time to buy major household items. An index level of 100 indicates that the balance of confidence or optimism is equally weighted, while an index of greater than 100 indicates that optimists outnumber pessimists. The consumer sentiment index has been found to be a good predictor of economic activity.
Disclaimer: Westpac Banking Corporation, the University of Melbourne and the Melbourne Institute give no representation, make no warranty, nor take any responsibility as to the accuracy or completeness of any information contained herein and will not be liable in contract tort, for negligence or for any loss or damage arising from reliance on any such information. The WestpacMelbourne Institute Survey of Consumer Sentiment report presents the results of a survey of more than 1200 households, together with the professional analysis and views of the Melbourne Institute. These views and findings do not necessarily coincide with those of the Westpac Banking Corporation. For information on the data contained in the report contact the Melbourne Institute, The University of Melbourne, on (03) 8344 2196. 2012The University of Melbourne, Melbourne Institute of Applied Economic and Social Research This report is copyright. Apart from any fair dealing for the purposes of study, research, criticism or review, as permitted under the Copyright Act, no part may be reproduced without written permission.
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