Strong commitment

CONSUMER sentiment may have fallen for the second month in succession, but consumers are showing no signs of pulling back from lending finance commitments.

An Australian Bureau of Statistics report into Australian lending finance indicates that personal finance commitments jumped 6.9 per cent in June 2002 to $5.3 billion, seasonally adjusted. This follows a 1.4 per cent rise in the previous month and a $400 million rise from nine months earlier.

Revolving credit commitments rose by 11.8 per cent in June, while fixed landing increased by 0.9 per cent.

Housing finance for owner occupation climbed 1.2 per cent in the month to $8.4 billion.

In unadjusted terms, housing finance fell from $9.35 billion to $8.10 billion. Personal finance for motor vehicle purchases dropped to $855 million in June, compared with $967 million the previous month.

Explaining the decline in consumer sentiment in the Westpac-Melbourne Institute Index of Consumer Sentiment, Westpac economics general manager Bill Evans said consumers had been unnerved by the US stockmarket collapse.

“While Australian consumers are generally not as directly exposed to the global equity markets, a feeling of unease is clearly developing amongst certain groups,” Mr Evans said.

Confidence among managers and professionals dropped off 7.1 per cent.

Sales and clerical staff confidence fell sharply by 10.6 per cent.

However, tradespeople and labourers were more confident.

“This presumably highlights the contrast between equity and global economic concerns with the continued buoyancy of the domestic house building market,” Mr Evans said.

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