NZ consumer confidence slips in June as outlook gets murkier

Friday 19th June 2015

New Zealand consumers remained bubbly in June, though a murkier future tempered some of the upbeat sentiment.

The ANZ Roy Morgan consumer confidence index fell to 119.9 in June from 123.9 a month earlier, while remaining above the long-term average. The current conditions index slipped 2 points to 122.6, while the future conditions index dropped 5.3 points to 118.1. Expectations on how the economy would perform in the coming 12 months dropped to the lowest level in more than two years, with a net 11 percent of the 1,000 people surveyed seeing good times ahead.

"It's natural to be a little glum heading into winter, but the muddy conditions do not explain the fall in our consumer confidence indexes," ANZ Bank New Zealand chief economist Cameron Bagrie said in his report. "Economic headwinds are becoming more pronounced - there is a reason interest rates are on the slide."

The survey follows weaker-than-expected economic growth of 0.2 percent in the first three months of the year, a third of what the Reserve Bank was forecasting. The slowing growth came from the oil and gas, and dairy sectors which both suffered from weak prices sapping production.

Today's survey also showed households were less optimistic about the long term prospects for the economy, with a net 17 percent seeing good times ahead over the next five years, down from 25 percent in May.

A net 7 percent of respondents said they were better off now than the same period a year ago, unchanged from May, though 38 percent thought it was a good time to buy a major appliance, down from 42 percent a month ago.

Respondents expect an annual pace of inflation of 3.4 percent over the next two years, down from a 3.6 percent pace predicted in May, while house prices are seen rising at a 5.3 percent pace, slowing from 5.5 percent.

BusinessDesk.co.nz

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