Consumer Sentiment Index

IBISWorld forecasts consumer sentiment to rise by 3.1 points in 2024-25, to average 90.3 index points. Nonetheless, the index will be in negative territory. High inflation has increased consumers’ day-to-day expenditure, weighing on consumer sentiment. However, the likely easing of inflationary pressures in the current year has supported consumer sentiment. The high cash rate, which is expected to fall slightly in the current year, has caused interest payments on property and other debt to surge, further weighing on consumer expenses and, therefore, sentiment. These factors have hampered growth expectations domestically. As such, economic uncertainty has flowed through to reduced consumer sentiment.

The COVID-19 pandemic has had a significant effect on consumer sentiment. In April 2020, the index reached its lowest level since July 2008, when the global financial crisis placed significant downward pressure on consumer sentiment. In particular, consumer sentiment fell into negative territory over the two months through May 2020, coinciding with a strict government-mandated shutdown. While consumer sentiment returned to positive levels following the easing of Alert Level 2 restrictions in June 2020 and largely maintained an upward trend over the subsequent months, additional outbreaks and periods of increases in the Alert Level system continued to weigh on consumer sentiment.