NZ consumer confidence dips in March, still upbeat

Friday 17th March 2017

New Zealand consumer confidence dipped in March as net optimism toward the economy eased, but remained above average.

The ANZ-Roy Morgan consumer confidence index decreased to 125.2 from 127.4 in February, still above the average of 118. The current conditions index slipped to 125.9 from 128 while the future conditions index eased to 124.8 from 127.

"The data continues to signal a good tempo for spending trends and economic momentum," said ANZ Bank New Zealand chief economist Cameron Bagrie.

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.

ANZ's composite confidence gauge, which combines the business and consumer indicators, continues to estimate 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 - at least not for long - but the overall message is that the economy is showing "little sign of a turn".

Government figures yesterday showed the economy grew at an annual pace of 2.7 percent in the December quarter, slowing from the September period as a wet spring weighed on agricultural production. Still, forward-looking indicators including today's Bank of New Zealand-BusinessNZ performance of manufacturing index were projecting a recovery in the first three months of 2017.

Today's ANZ report showed a net 13 percent of the 1,004 people surveyed said they were better off now than a year ago versus a net 15 percent in February. However, a net 32 percent expect to be in a stronger financial position 12 months from now, compared to 31 percent a month ago.

More people still see the economy improving this year with a net 21 percent predicting better times for the nation over the coming 12 months, compared to 26 percent in February, while 22 percent have an upbeat five-year outlook, down from 24 percent.

Households were still optimistic about spending with a net 38 percent saying now was a good time to buy a big-ticket item, down from 41 percent in February. Annual inflation expectations eased to 3.4 percent from 3.6 percent. House price inflation expectations for the next two years rose to 4.6 percent from 4.3 percent in February.

BusinessDesk.co.nz

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