NZ consumer confidence creeps up in April as Kiwis embrace upbeat economic outlook

Thursday 21st April 2016

New Zealand consumer confidence rose in April as Kiwis remained optimistic about the state of the economy, shrugging off concerns a downturn in the dairy sector would spread across the nation.

The ANZ-Roy Morgan consumer confidence index increased to 120 in April from 118 a month earlier, just above the historical average. Both the current conditions and future conditions indexes gained by 2 points to 123.2 and 117.8 respectively.

"If they wanted to, there are a number of things that consumers could get wound up about," ANZ Bank New Zealand economist Phil Borkin said in a note. "But consumers continue to just get on with it like clock-work."

Consumer optimism had dipped in the previous two months as the prospect of a downturn in the dairy sector weighed on expectations for the economic outlook. However, growth has remained robust on the strength of booming tourism and the country's labour market continues to spit out new jobs and absorb the net inflow of migrants that's swelled the working population.

Today's survey shows a net 8 percent of the 1,000 respondents said they were better off now than they were a year earlier, unchanged from March, and a net 28 percent see themselves in a better position financially in 12 months' time, down from 29 percent.

A net 9 percent expect better economic conditions in the coming year, up from 3 percent in March, and over a five-year horizon, 17 percent expect more good times than bad times, unchanged from the prior survey.

Respondents were happier to buy big-ticket items, with a net 38 percent saying now's a good time to buy a major household item compared to 34 percent a month earlier, even as they expected faster price rises, predicting an annual pace of inflation of 3.5 percent over the next two years, compared to 2.9 percent in March.

On house prices, consumers expect an annual increase of 5.3 percent over the next two years, up from 4.4 percent in March.

ANZ's Borkin said rising house prices added to the "feel-good factor" for consumers, even as they made it more difficult for first home buyers.

BusinessDesk.co.nz

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