SYDNEY, April 15 (Reuters) - A measure of Australian consumer sentiment fell in April as people fretted about the economic outlook even as they felt better about splashing out on big-ticket household items.
Wednesday’s survey of 1,200 people by the Melbourne Institute and Westpac Bank showed its index of consumer sentiment slipped a seasonally adjusted 3.2 percent in April, from March when it dipped 1.2 percent.
The index reading of 96.2 was 3.5 percent lower than in April last year. The retreat unwound more of February’s sharp 8.0 percent gain which followed a cut in interest rates early that month.
The Reserve Bank of Australia (RBA) has since held rates steady, but has left the door open for further easing if needed.
“We must recognise that confidence is again looking vulnerable heading into the Budget announcement next month,” said Westpac’s chief economist Bill Evens.
“Indeed, recognition that the next Budget is imminent may have contributed to this month’s weakening in confidence.”
The Liberal National government of Tony Abbott releases its fiscal budget on May 12 and is struggling to find a way back to surplus as sliding export prices eat into tax revenue.
The April survey showed its measure of economic conditions for the next five years fell a sharp 10.2 percent, while that for the next 12 months dropped 6.7 percent.
A measure of family finances compared to a year ago fell 7.4 percent, while the outlook for the next 12 months eased a relatively slim 0.7 percent.
Despite all the anxiety, respondents still felt it was a good time to buy a major household item, with that index climbing 5.9 percent in April.
Sales of household goods have been running strongly so far this year amid buoyant property markets in Sydney and Melbourne, while sales of new vehicles enjoyed a record March performance.
Still, Evans felt the consumer mood was fragile enough to warrant more stimulus from the central bank.
“We are extremely confident that the RBA will finally deliver the much anticipated second cut of 25 basis points on May 5”, he said. (Reporting by Wayne Cole; Editing by Shri Navaratnam)