Thursday 16th February 2017
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New Zealand consumer confidence eased in February, although remained above average, with more consumers feeling better off personally than they did a year earlier.
The ANZ-Roy Morgan consumer confidence index decreased to 127.4 last month from 128.7 in January, but was up on a seasonally adjusted basis. The current conditions index slipped 2 points to 128, while the future conditions index dropped 1 point to 127.
New Zealand's economy has been underpinned by an expanding population, strong tourism, and a buoyant property market stoking consumer spending, while the labour market has remained robust with new jobs being created for the inflow of migrants.
"The economic landscape looks pretty radiant for consumers," ANZ Bank New Zealand chief economist Cameron Bagrie said in a note. "A high NZD is keeping imported products cheap. Wage gains might be modest but income growth is still up 4.8 percent on a year ago, courtesy of strong employment growth.
"Household (and consumer) wealth/balance sheets have been given a huge fillip courtesy of house price gains (though slowing of late). Dairy sector incomes are on the recovery path. Interest rates have risen from their lows, potentially denting borrowers’ disposable income, but it’s supporting depositors and savers, a group often forgotten about."
ANZ's composite confidence gauge, which combines the business and consumer indicators, estimates annual GDP growth rising past 4 percent through the rest of the year. Bagrie said the bank doesn't think the economy will grow that fast, but the overall message was for strong growth.
A net 15 percent of the 1,000 people surveyed said they were better off now than a year ago, the highest reading since early 2008, while a net 31 percent expect to be in a stronger financial position 12 months from now, compared to 34 percent a month ago.
More people see the economy improving this year with a net 26 percent predicting better times for the nation over the coming 12 months, compared to 25 percent in January, while 24 percent have an upbeat five-year outlook, down from 25 percent.
Households were still optimistic about spending with a net 41 percent saying now was a good time to buy a big-ticket item, down from 49 percent in January, and annual inflation expectations eased to 3.6 percent from 3.7 percent. House price inflation expectations were unchanged from January at 4.3 percent per year for the next two years.
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