New data has revealed that consumer sentiment has declined this month – a surprise result that has “dashed” hopes that sentiment was about to head higher, according to Westpac.
The Westpac Melbourne Institute Index of Consumer Sentiment showed a 4 per decrease from 99.1 in March to 95.1 in April, which Westpac chief economist Bill Evans labelled as “disappointing”.
“After holding above 100 in the November–February period, the index has now been below 100 for two consecutive months,” he said.
“A print below 100 means that pessimists outnumber optimists. That had consistently been the case in the March 2014 to October 2015 period when the index only exceeded the 100 level twice in 20 months.
“With four consecutive readings above 100, we were hopeful that confidence had moved on to a sustainable higher plain. Today’s result would appear to dash those hopes.”
The index is now 6.4 per cent below its reading six months ago in November.
Mr Evans said that despite the disappointing result in consumer sentiment, Westpac expects the Reserve Bank to keep rates on hold at its next board meeting in May.
“We retain our call that rates will remain on hold for the remainder of 2016,” he added.
[Related: Confidence among businesses lifts again]