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Australian Consumer Sentiment Drops Most in 47-Year History

Australian consumer confidence recorded the biggest fall in the 47-year history of the survey.

Australian Consumer Sentiment Drops Most in 47-Year History
People walk along a shoreline during a partial lockdown imposed due to the coronavirus in Bondi Beach, Sydney, Australia. (Photographer: Brendon Thorne/Bloomberg)

(Bloomberg) -- Australian consumer confidence recorded the biggest fall in the 47-year history of the survey, bringing the index down to levels last seen during recessions, according to Westpac Banking Corp.

Household sentiment plummeted 17.7% to 75.6 in April as governments instituted widespread restrictions to stem the spread of coronavirus, shutting down large tracts of the economy, Westpac said. The confidence survey was based on 1,200 adults across Australia in the week of April 6-11.

The details of the survey “are all very disturbing and reflect the large shocks to jobs and spending,” said Bill Evans, chief economist at Westpac, adding the most surprising message was a collapse in confidence in the housing market.

Australian Consumer Sentiment Drops Most in 47-Year History

“While the drop in confidence this month is severe, it could well have been worse,” Evans said. “Despite the bleak and threatening backdrop, Australia’s pandemic experience to date has been much less debilitating than that of the hardest hit areas abroad.”

Australia had recorded just under 6,500 cases and 62 deaths as of this morning, but the nation’s Treasury forecasts unemployment will almost double this quarter to 10% and would’ve gone to 15% if not for fiscal stimulus measures.

These measures seem to have heartened households’ longer-term view, with the extremely negative economic outlook confined to the near term, Westpac said. The ‘economy next 5yrs’ sub-index was down just 3.8% in the month, and at 87 “is still comfortably above” recent cyclical lows, the bank said.

“Sentiment around housing collapsed in April with assessments of both ‘time to buy’ and ‘price expectations’ plunging to the most negative levels” since the 2008 financial crisis, Westpac said. The drop was consistent across all major states, it said.

©2020 Bloomberg L.P.