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Australian consumers fret on economic outlook

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Consumer sentiment inched lower in April as worries about the economic outlook overshadowed growing optimism about the state of family finances, a survey showed on Wednesday.

The survey of 1,200 people by Melbourne Institute and Westpac Bank found consumer sentiment dipped 0.7 per cent in April, from March when it had risen by 0.1 per cent.

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That left the index at 99, up 4.1 per cent on this time last year but just below the level where the number of optimists matches pessimists.

The sub-indices in the survey showed some easing in money concerns. The measure of family finances compared to a year ago rebounded 8.5, while that for family finances over the next 12 months rose 2.4 percent.

Sentiment on the economy went the other way, however.

Expectations for the economic outlook over the next 12 months fell 6.5 per cent, and the assessment of economic conditions for the next five years dropped 2.7 per cent.

The measure of whether this was a good time to buy major household items lost 2.9 per cent.

Westpac’s chief economist, Bill Evans, felt confidence had held up well in the face of media attention over housing affordability and growing geopolitical tensions globally.

With expectations for the economy weakening, fewer people thought it was a good time to buy major household items such ... With expectations for the economy weakening, fewer people thought it was a good time to buy major household items such as televisions. Photo: Louie Douvis

“Arguably these factors could have been expected to produce a marked fall in confidence,” said Evans.

Concerns over housing affordability have ballooned in recent years as home prices climbed in Sydney and Melbourne.

Reuters

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