SYDNEY, March 11, 2026, 09:05 AEDT
Westpac Banking Corporation on Tuesday reported a slight uptick in Australian consumer sentiment for March, though the headline number hid a sharp late decline as Middle East tensions escalated mid-survey. The Westpac-Melbourne Institute index posted a 1.2% rise to 91.6, yet late survey returns pointed to a reading nearer 84. Sentiment below 100 signals more pessimists than optimists.
This puts Westpac in the spotlight, just weeks after executives assured investors that household and business credit demand would hold up, following a first-quarter profit beat. For the December quarter, Westpac logged unaudited net profit of A$1.9 billion, buoyed by A$12 billion in fresh deposits and A$22 billion in new lending. Shares hit a record high after the numbers landed.
Westpac economist Matthew Hassan noted consumers have so far registered just a “relatively mild negative reaction” to the February rate hike, but nerves were beginning to fray as the week progressed. Escalating conflict in the Middle East, he said, is beginning to shake Australians’ confidence. Westpac IQ
Beneath the headlines, results were mixed. Westpac’s reading on whether now’s a good time to buy a big-ticket household item jumped 4.9% to 98, and the family finances index nudged up to 80.2. But the outlook for the economy over the coming year dropped 2.9% to 85.9, while the unemployment expectations index—which rises when more respondents anticipate joblessness—moved up 3.8% to 134.7.
Tuesday brought another downbeat signal from ANZ and Roy Morgan. Their joint weekly consumer confidence index slid 3.7 points to 73.4—now sitting at its lowest since July 2023. ANZ economist Madeline Dunk pointed to a steep drop in expectations for household finances over the coming year as the main driver.
The Reserve Bank of Australia raised its cash rate by 25 basis points to 3.85% back in February. Eyes now move to the next policy meeting on March 16-17. Investors are watching the major banks closely for any signs that cooler consumer sentiment could dent borrowing.
Housing continues to trouble Westpac. In a separate release Tuesday, the bank noted that 26% of first-home buyers point to limited listings as an obstacle, while 39% blame rivalry from other buyers. Consumer chief Carolyn McCann described housing supply as “one of our most urgent priorities.” Westpac
March’s slight uptick in sentiment may not last long. ANZ-Roy Morgan pegged inflation expectations sharply higher, up at 6.1%. The RBA, for its part, warned in February that inflation would probably keep running above its 2%-3% target range for a while. Any further bump in fuel prices threatens to tighten the screws on household budgets and pull back loan demand.
