The Westpac-Melbourne Institute index of consumer sentiment increased 1.9% in February, after recording a 4.5% dip in January. Subindices tracking attitudes towards finances over the next 12 months lifted 2.6% while finances compared to a year ago was down 0.6%. The index now stands 14.2% above its pre-pandemic level in February 2020.

Westpac chief economist Bill Evans said the bounce back in sentiment in February signals consumers remain confident as COVID-19 management locally has had “a constructive effect on confidence” reflecting the success of contact tracing and lockdowns in containing a worrying cluster of cases since the latest survey in January. Evans said it was vital households which had built up a large financial buffer throughout the pandemic prepare to use it to offset the impact on the economy as the Federal Government’s JobKeeper program ends in late March.