Households Turn Cautious, Firms Still Resilient

• The Westpac Melbourne Institute consumer sentiment survey fell 2.6% to 90.5 in February, its third straight decline, pointing to a gradual rather than abrupt response to tighter policy.
• The reaction remains milder than historical post-hike averages of around 3.8%, suggesting households are adjusting to higher borrowing costs without sharp retrenchment.
• Survey detail shows growing caution, with views on family finances down 4.7% m/m and major purchase intentions falling 5.6%, consistent with easing consumption momentum.
• The NAB business survey saw confidence edge up 1 point to +3, while conditions slipped 3 points to +7 as trading and profitability softened.
• Capacity utilisation eased to 82.9%, still 1.5ppts above its long-run average, leaving the RBA facing moderating demand signals alongside still-tight capacity.