Westpac Consumer Confidence Index

The Westpac Consumer Confidence Index tracks views of Australian households through the Westpac-Melbourne Institute Survey of Consumer Sentiment, jointly run since 1974. Each month about 1,200 randomly chosen adults aged 18 and over answer 5 questions, with answers weighted to match Australia's population mix. It measures stated views, not actual spending, retail sales or GDP, and it covers Australia only and is not an official statistic. A reading of 100 is neutral, meaning optimists exactly balance pessimists, while higher readings show net optimism and lower readings show net pessimism.

Responses are collected over 1 week in the first half of each month, and results usually appear on the second Tuesday at 10:30am Sydney time. Each release is a bulletin with commentary, tables and charts issued under a strict embargo.

The same bulletin carries side gauges that are not components: time to buy a dwelling, unemployment expectations, house price expectations and rate expectations. A higher unemployment reading means more consumers expect unemployment to rise, and quarterly extras cover news recall and savings. Each release is final and never revised, and readers judge it by level against 100 and by % change. The long-run average moves as history extends.

The 5 components capture household views on money, the economy and spending appetite.

• Family finances vs a year ago: household funds compared with 12 months earlier, catching cost strains.
• Family finances, next 12 months: expected household funds over the year ahead.
• Economic conditions, next 12 months: near-term national economic outlook.
• Economic conditions, next 5 years: medium-term national economic outlook.
• Time to buy a major household item: whether the time suits big purchases, a stand-in for spending plans.

On September 12, 2023 the index stood at 79.7, down 1.5% on the month from 81.0 and 5.6% on the year. It extended more than a year of deep pessimism last seen in the early 1990s. Family finances versus a year ago fell 4.4% to 61.5, while year-ahead family finances rose 1.8% to 91.6 and near-term outlook rose 0.4% to 78.5.

Mortgage holders gained 7.8% on easing rate fears, but renters fell 6.1% and outright owners fell 5.8%. Time to buy a major item fell 3% to 76.6, below its early 1990s average of 91, as petrol rose 15% and 53% recalled inflation. The average hid the split between components and groups.

1. Survey sample: about 1,200 randomly chosen Australian adults aged 18 and over answer in the survey week, with results weighted to match population mix. Fieldwork is by OzInfo and Dynata.
2. Sub-index balance: each of the 5 questions forms a diffusion-style score centred on 100 from favourable minus unfavourable shares. For example, 30% favourable and 50% unfavourable gives 100 + (30 - 50) = 80.
3. Headline average: the headline is the simple mean of the 5 sub-indexes. For example, sub-indexes of 80, 98, 86, 96 and 98 give (80 + 98 + 86 + 96 + 98) / 5 = 91.6.
4. Seasonal adjustment: headline and components are seasonally adjusted, while dwelling, unemployment expectations and house price expectations gauges are not.
5. Change reporting: releases show month-on-month % change and year-on-year % change from the adjusted series.