The Westpac-Melbourne Institute Consumer Sentiment Index has recorded a significant upswing, climbing 12.8 per cent to reach 103.8 points. This marks the first time in nearly four years that the index has entered “net positive” territory, indicating a shift towards optimism among Australian consumers. Westpac is one of Australia’s largest banking and financial services institutions. The Melbourne Institute is a leading economics and social research institution based at the University of Melbourne.
According to Westpac’s head of Australian macro-forecasting, Matthew Hassan, a reading above 100 signifies that optimists now outnumber pessimists. He described the result as “extraordinary and somewhat surprising,” highlighting that it is the most positive reading since February 2022. Excluding the pandemic-affected years of 2020 and 2021, this level of optimism has not been observed in seven years.
A substantial portion of the November sentiment boost can be attributed to a more confident outlook on the Australian economy. The sub-indices measuring the “economic outlook, next 12 months” and the “economic outlook, next 5 years” both experienced substantial gains, increasing by 16.6 per cent and 15.3 per cent respectively.
Both of these sub-indices are now firmly in positive territory, surpassing their long-run averages. This suggests a growing belief among consumers that the economic climate will improve in both the short and long term, contributing to the overall positive sentiment reflected in the headline index.
