Consumer sentiment is down 5% this month: Westpac

The Westpac Banking Corp (ASX: WBC) share price is in the red today as the bank announces consumer sentiment has fallen 4.8% this month.

| More on:
Bored man looking at his iMac with his head held in one hand feeling dismayed at AGL Energy's lower dividend

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Westpac Banking Corp (ASX: WBC) has announced consumer sentiment has fallen 4.8% this month, with the Federal Budget having nearly no impact on consumer confidence.

The bank's report comes on a day in the red for the Westpac share price, which is currently down 1.47%, trading at $25.09.

While a fall in consumer sentiment rarely brings anything good with it, Westpac's chief economist Bill Evans told Australians not to worry, saying:

While a 4.8% fall is always going to attract attention, we should put this result in perspective. It is still the second highest print for the Index [of Consumer Sentiment] since April 2010 and does follow an 11% rise in the index over the previous three months.

Let's take a closer look at the latest results of the Westpac-Melbourne Institute Index of Consumer Sentiment.

Budget reaction

Evans said there was no evidence of a consumer reaction to the Budget, although political loyalties did affect their confidence levels.

"No doubt the Budget achieved a positive political objective with a 1% dip in confidence amongst Coalition voters contrasting to an 8.1% fall in confidence amongst ALP supporters," he said.

The Federal Budget dropped halfway through Westpac's surveying period.

According to the bank, 1 in 5 Australians believes they will be better off due to the Budget's measures. That's in contrast to 2020 when 1 in 4 consumers thought they'd be better off as a result of the Budget.

Said Evans:

This undoubtedly reflects the different aims of these recent Budgets which have been focussed on addressing the economic challenges of the pandemic. Previous Budgets since 2010 have been framed around ensuring a path back to Budget surplus.

The cost of new initiatives in this year's Budget – 4.1% of GDP – and in 2020 – 5.5% of GDP is in stark contrast to, say, the 0.5% of GDP in 2019 when the government was balancing the competing demands of an imminent election and the need to reach Budget balance.

The report noted that the housing market might be impacted by consumer sentiment. Since November, all jurisdictions have seen a 15% to 40% decline in the 'time to buy a dwelling' index.

Meanwhile, employees in the arts industry have topped the list as the most sceptical Australians, with a 33% fall in consumer confidence. Evans said this was perhaps spurred by a lack of protective measures in the Budget.

Westpac share price snapshot

Despite a poor day's trade, the Westpac share price is having a great year on the ASX. Currently, the Westpac share price is up 27% year to date. It has also gained 64% since this time last year.

It has a price-to-earning (P/E) ratio of 21.65 and a market capitalisation of $93.4 billion. The bank has around 3.6 billion shares outstanding.

Should you invest $1,000 in Westpac Banking Corporation right now?

Before you buy Westpac Banking Corporation shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Westpac Banking Corporation wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Bank Shares

A man sits in deep thought with a pen held to his lips as he ponders his computer screen with a laptop open next to him on his desk in a home office environment.
Bank Shares

Why does Macquarie think the big 4 ASX bank shares are 'on borrowed time'?

With Australian interest rates likely to fall, the banks face compressed margins in the medium term.

Read more »

Bank building in a financial district.
Bank Shares

What happened with the big four ASX 200 bank stocks in April?

CBA led the charge among the ASX 200 bank stocks in April. But why?

Read more »

A young male ASX investor raises his clenched fists in excitement because of rising ASX share prices today
Bank Shares

Why did CBA shares jump over 10% in April?

It was a great month for owners of this banking giant's shares.

Read more »

Happy young woman saving money in a piggy bank.
Bank Shares

Which big 4 ASX bank share does Macquarie currently prefer?

Here’s why Macquarie likes this bank the most.

Read more »

Bank building with word Bank on it.
Bank Shares

ASX bank shares outperformed in April. Will this continue according to Macquarie?

What drove the strong performance by banks in April?

Read more »

a couple and their baby sit together at their computer carrying out digital transactions and smiling happily.
Bank Shares

3 things about BOQ stock every smart investor knows

This smaller bank has aspirations to become a larger competitor.

Read more »

Man raising both his arms in the air with a piggy bank on his lap, symbolising a record high.
Bank Shares

CBA shares reach new all time high after 4% surge

CBA shares have done it again.

Read more »

Bank building in a financial district.
Bank Shares

Would I buy ANZ shares right now?

Would the bank be a good investment right now?

Read more »