NZ consumer confidence climbs in January on improving future outlook

Thursday 22nd January 2015

New Zealand consumer confidence rose for a second month in January as households grew more upbeat about the prospects for the future.

The ANZ Roy Morgan consumer confidence index rose to 128.9 from 126.5 in December, reflecting elevated optimism that typically comes with the summer months. The current conditions index edged up 0.7 of a point to 126.8, while the future conditions index rose to 130.3 from 126.8 in January. On a seasonally adjusted basis, confidence slipped 1.8 points to 125, still above the decade average of 119.

"Levels of confidence remain elevated and households are still optimistic over the future, suggesting that the domestic expansion has more legs," ANZ Bank New Zealand economist Steve Edwards said in a note. "Increasingly, households believe that the future is going to be better."

Retailers have provided mixed reports over the Christmas trading season, with clothing chain Hallenstein Glasson reporting robust sales leading to a profit upgrade, while Warehouse Group warned of an earnings downgrade after unseasonal weather led to increased discounting.

The ANZ Roy Morgan survey of 1,001 people found a net 10 percent said they were better off financially than they were a year earlier, up from 9 percent in December, while a net 33 percent expect to be better off in a year's time, up from 29 percent.

A net 29 percent anticipate good economic conditions in the coming 12 months, up from 24 percent in December, and a net 29 percent also see continuous good times over the next five years, up from 28 percent.

A net 44 percent of respondents said it is a good time to buy major household items, up from 43 percent in December, and predicted an annual inflation rate of 3.7 percent in the next two years, up from 3.1 percent in December. Respondents expect house prices will rise at an annual 5 percent pace over the next two years.

BusinessDesk.co.nz

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