Consumer sentiment drops 5% in March

Consumer sentiment has fallen about 5% from February to March, according to the new Westpac–Melbourne Institute Index of Consumer Sentiment.

The index fell from 101.1 in February to 96.1 in March.

“With the index below the 100 level, pessimists clearly outnumber optimists,” Westpac’s chief economist Bill Evans said in a statement.

Worries about higher interest rates and job security are among the drivers.

“This ‘rate effect’ is consistent with the 6.8% fall in the confidence of those folks who have a mortgage. However, this observation does not explain why there was a 10.8% fall in the confidence of respondents who are renting accommodation. There are other forces at work,” Evans says.

“Petrol prices, for example, rose 3% between the February and March survey to average around $1.45 a litre. However, our supplementary questions indicate that respondents are particularly concerned about economic conditions and employment.”

The survey is based on telephone interviews of 1200 adults selected at random, across Australia.