Consumer confidence little changed

Monday 20th September 2010

New Zealand consumer confidence held its ground this month as kiwis indicated they feel gloomier right now but are more optimistic about the future.

The ANZ-Roy Morgan Consumer Confidence survey edged up 0.1 point to 116.4 in September, as people grew more pessimistic about the present, and more upbeat about the future. The current conditions index fell to 102.9 from 103.7 in August, while the future conditions index rose 0.8 point to 125.5.

"The gap between current and future conditions remains wide," Cameron Bagrie, the bank's chief economist, said in his report.

"With current conditions the key bellwether in regard to actual spending trends, such a gap suggests continued caution on behalf of consumers."

The survey of 1,021 people is in line last week's Westpac McDermott Miller Consumer Confidence survey, which showed a softening in the third quarter, with the short-term outlook deteriorating as the longer-term view picked up.

People were more downbeat on buying major household items, with a net 18% saying it's a good time to buy compared to a net 25% in August. Consumers' expectation for inflation was unchanged at a 3.6% pace over the next two years.

The Reserve Bank flagged soft consumer spending as one of the reasons why it held the official cash rate at 3% last week, and pared back its forecast track for future rate hikes.

That comes as a net 12% of respondents believe they are worse off now than a year earlier, an improvement on the net 18% of pessimists in August, while a net 28% expect to be better off in a year's time, compared to 29% a month earlier.

A net 5% of respondents see the economy improving over the next 12 months, down from a net 7% a month ago, while a net 43% think the next five years will get better, compared to 38% in August.

The data captured the 7.1 magnitude Canterbury earthquake, though confidence in the region rose 2 points to 113.9.

Businesswire.co.nz

Comments from our readers

No comments yet