A measure of Australian consumer sentiment slipped to its lowest in more than a year in August as worries over family finances swamped increasing optimism about the economic outlook.
The survey of 1,200 people by the Melbourne Institute and Westpac Bank published on Wednesday found consumer sentiment fell 1.2 per cent in August, from July when it edged up 0.4 per cent.
The index reading of 95.5 was 5.5 per cent lower than in August last year, showing pessimists outnumbered optimists, and the lowest since April 2016.
“The index components point to clear pressure on family finances,” said Westpac Chief Economist Bill Evans.
“Much of the weakness is likely to reflect a mix of weak growth in wages; increases in key costs such as electricity and emerging concerns about rising interest rates.”
Wage growth is running at record lows while media coverage of surging power prices has been wall to wall.
Prime Minister Malcolm Turnbull is meeting with the heads of major utilities on Wednesday to urge restraint in price hikes.
The impact on consumers was clear in the survey with its measure of family finances compared to a year ago sliding 5.1 per cent. Likewise, its index of whether it was a good time to buy a major household item dived 4.9 per cent.
Those falls overshadowed improvements elsewhere. The measure of family finances over the next 12 months edged up 2.1 per cent, while the economic outlook for the next 12 months added 0.4 per cent, and that for the next five years rose 2.3 per cent.
The grim mood in the survey is in marked contrast to increasingly upbeat business polls. A NAB survey out on Tuesday showed firms felt conditions were the best since early 2008 with sales, profits and employment all strong.
Analysts note that, historically, business surveys have a far closer correlation to activity in the broader economy than do polls of the consumer mood, which can prove fickle from month to month.
Indeed, while consumers might sound pessimistic in a survey that does not necessarily translate to spending habits.
Official data has shown retail sales rebounded strongly in the second quarter as heavy discounting stoked demand, while sales of new vehicles are at record highs.