February 11, 2020 / 11:49 PM / 2 months ago

Australian consumer sentiment brightens as bushfires recede

SYDNEY, Feb 12 (Reuters) - Australian consumer sentiment improved slightly in February as the threat from bushfires eased across the eastern seaboard, though concerns over the spread of the coronavirus in China and globally loom as a fresh headwind.

Wednesday’s survey showed the Melbourne Institute and Westpac Bank index of consumer sentiment rose 2.3% in February, from January when it fell 1.8%.

The index was still down 8.0% from a year earlier, and at 95.5 indicated pessimists continued to outnumber optimists.

“The lift in sentiment this month likely reflects easing concerns around bushfires and comes despite some significant negative developments, most notably the coronavirus outbreak abroad,” said Westpac senior economist, Matthew Hassan.

“That said, the full impact of the outbreak is yet to be felt locally and we may see more of a drag on sentiment in the months ahead, particularly as the hit to sectors such as tourism and education start to come through.”

The survey’s measure of the economic outlook for the next 12 months picked up by 5.4%, while the five-year outlook improved by 4.3%. The outlook for family finances for the year ahead edged up 0.1%, but the index of finances compared to a year ago dipped 1.0%.

The measure of whether it was a good time to buy a major household item lifted 2.7%, though consumer spending overall remains subdued. At 116.4, the index remains well below its long run average of 127. (Reporting by Wayne Cole; editing by Jane Wardell)

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