Australian consumers are yet to break free from the sour mood of the past few years despite a short-lived burst of optimism.
The Westpac Melbourne Institute sentiment survey has been trending a little higher than the rock-bottom results of the past two years, influenced by rising inflation and interest rate hikes, although it did record another decline this month.
After picking up 6.2 per cent in February, the index slid by 1.8 per cent to 84.4 index points in March to remain well below the long-run average of 100.7.
Still, sentiment has improved from this time in 2023, when it was lodged at 78.5 index points.
Westpac senior economist Matthew Hassan said the stronger February result upped hopes for a recovery in consumer sentiment after two years of doom and gloom.
"The March survey update shows that progress continues to be slow at best," he said.
"Consumers are still deeply pessimistic and becoming more concerned about the economy’s near-term outlook”, Mr Hassan said.
Four of the five sub-indexes fell in March, with consumers the most downcast when quizzed about the 12-month economic outlook.
Respondents were also asked about their news recall, which showed inflation coverage still cutting through but with less negativity attached than in December.
Consumers also viewed news on the budget and taxation as lightly more favourable than they did in December, which Mr Hassan said probably reflected changes to the stage three tax cuts.
News on employment and interest rates was also considered a little less grim than in the past, but news on economic conditions was the major exception.
Mr Hassan said this might have been driven by coverage of the soft December quarter national accounts.
