Friday 2nd August 2019
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Consumer confidence took a hit in July as consumers fret about the future.
The latest ANZ-Roy Morgan survey of consumer confidence fell 6 points in July to 116.4, the lowest reading so far this year and below the historic average of 120.0.
Perceptions of current conditions fell 2 points to 125.8 while the future conditions index fell 9 points to 110.2, the lowest level since September 2015.
A net 39 percent think it's a good time to buy a major household item, down one point from the prior survey.
“Despite easing slightly in July, the proportion of people still thinking it’s a good time to buy a major household item remains at a high level, which should support spending in the near term,” said ANZ senior economist Miles Workman.
People's perceptions of their current financial situation fell three points, with a net 12 percent feeling financially better off than a year ago. A net 21 percent of consumers surveyed expect to be better off financially in a year's time, down 8 points.
Regarding New Zealand as a whole, perceptions regarding the economic outlook next year fell to a net 1 percent expecting conditions to worsen, versus a net 12 percent expecting conditions to improve in the prior survey. The five-year outlook fell 5 points to 11 percent expecting an improvement.
ANZ Bank's composite gauge - which combines business expectations and intentions with overall consumer sentiment - "remains consistent with our expectation that economic growth is finding a floor. But downside risks appear heightened and, so far, there is little evidence to support our view that growth will begin to gradually recover from the second half of 2019," said Workman.
Earlier this week, ANZ's business outlook survey showed confidence continued to weaken in July, with a net 44.3 percent of the 363 respondents to the survey expecting general business conditions will deteriorate during the coming year, compared with 38.1 percent in June.
Workman said that the prospects for a "sharp acceleration in growth" are looking dimmer and he expects the central bank to lower its growth forecasts in next week's monetary policy statement.
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