What is the 'Westpac Consumer Confidence Index'

The Westpac Consumer Confidence Index is an index measuring the level of consumer confidence in Australia. The Westpac consumer confidence index is published by the Westpac group and is used to measure household economic expectations by averaging five different indexes that measure separate aspects of consumer sentiment and fiscal health.

The index is also called the Westpac Melbourne Institute Consumer Sentiment Index.

BREAKING DOWN 'Westpac Consumer Confidence Index'

The Westpac Consumer Confidence Index measures household views on current buying conditions in Australia, their views on eco-political policies such as taxation, their views on where they would invest at the present time and their views on economic news like inflation and employment numbers. The Westpac Group published numerous economic reports intended to measure Australia's economic climate, including retail sales figures, GDP figures and interest rate expectations.

Similar to the U.S. Consumer Confidence Index, the Westpac Consumer Confidence Index is a useful barometer measuring the degree of optimism on the state of the Australian economy, its primary gauge captures consumers sentiment as expressed through their levels of savings and spending. As a prime of reference, the Westpac Consumer Confidence Index's methodology is similar to the University of Michigan Consumer Sentiment Index, which is conducted by the University of Michigan's Institute for Social Research.

To measure changes in the level of consumer confidence in economic activity, Australia's Consumer Confidence Index uses five indices to reflect consumers’ evaluations of:

  • Household financial situations over the past year and the coming year
  • Anticipated economic conditions over the coming year and the next five years, and
  • Buying conditions for major household items

Consumers are also surveyed for attitudes toward buying conditions for cars and dwellings, their preferred place for savings, and their economic news recall. Generally speaking, a high reading is seen as positive (or bullish) for the Australian dollar (AUD), whereas a low reading reflects negative (or bearish) outlook.

Australian policymakers and the Reserve Bank of Australia (RBA), Australian's central bank, can use the Confidence Index to help form monetary and fiscal policy. The private sector can also glean valuable economic sentiment useful in anticipating employment needs, product pricing, and investment planning.

  1. NAB Business Confidence Index

    The NAB Business Confidence Index is the key measure of business ...
  2. Reserve Bank of Australia (RBA)

    The Reserve Bank of Australia is Australia's central bank, involved ...
  3. RBC Consumer Attitudes And Spending ...

    The RBC Consumer Attitudes And Spending By Household Index (RBC ...
  4. Michigan Consumer Sentiment Index ...

    The Michigan Consumer Sentiment Index is a monthly survey that ...
  5. Composite

    A composite is a grouping of equities, indexes or other factors ...
  6. Consumer Discretionary

    Consumer discretionary is an economic sector that comprises items ...
Related Articles
  1. Insights

    Consumer Confidence Index

    The Consumer Confidence Index is the result of a monthly survey of 5,000 U.S. households by the Conference Board that measures how optimistic or pessimistic consumers are about the economy's ...
  2. Investing

    Westpac Adds 1,622 Shares of TripAdvisor (TRIP)

    Australian bank and financial services provider Westpac recently increased its stake in shares of travel website company TripAdvisor Inc.
  3. Investing

    The Top 3 ETFs For Investing in Australia

    Learn about some of the best performing exchange-traded funds that investors use to obtain exposure to stock investments in Australia.
  4. Investing

    Mattel Stock: 4 Things to Watch (MAT)

    Here are the four leading economic indicators that could affect shares of Mattel Inc. in the next six months, but which ones will have the most impact?
  5. Insights

    5 Factors That Could Send The United States Economy Into A Double-Dip Recession

    A decline in consumer confidence and stock market correction could be enough to sink the economy again.
  6. Investing

    Consumer Confidence: A Killer Statistic

    The consumer confidence is key to any market economy, so investors need to learn how to analyze them.
  7. Insights

    Australia’s GDP Grows as Consumer Spending Rises

    The GDP growth of 3.0% in 2015 was better than the Reserve Bank of Australia’s estimates of 2.5%
  1. Which economic factors most affect the demand for consumer goods?

    Understand how key economic factors such as inflation, unemployment, interest rates and consumer confidence affect the level ... Read Answer >>
  2. Which consumer goods do Americans buy the most of?

    Learn about the consumer goods sector, which accounts for nearly one-third of consumer spending, as well as which goods account ... Read Answer >>
  3. What are some limitations of the consumer price index (CPI)?

    Despite being followed so relentlessly, the consumer price index has its limitations and is an imperfect a measure of inflation ... Read Answer >>
  4. What economic indicators are important for investing in the automotive sector?

    Discover the most important economic indicators when investing in the automotive sector: auto sales, unemployment and consumer ... Read Answer >>
  5. Which factors drive the marginal propensity to consume?

    Discover the main factors of economic policy that, according to Keynesian economic theory, drive the marginal propensity ... Read Answer >>
  6. What's the difference between a confidence level and a confidence interval in Value ...

    Learn about the value at risk, how confidence intervals and confidence levels are used to interpret the value at risk and ... Read Answer >>
Trading Center