Consumer confidence drops before first Budget
CONSUMERS are feeling a little bit less bulletproof, despite a strong labour market, low interest rates and a steady housing market supporting sentiment.
Less than three weeks from Finance Minister Grant Robertson’s first Budget, consumer confidence dropped 7.5 points to 120.5 in the April ANZRoy Morgan New Zealand Consumer Confidence Index to be just above the average of the series since it started in 2004.
ANZ chief economist Sharon Zollner said consumers appeared to have mixed views.
The current conditions index fell five points to 123.1 in April but the future conditions fell nine points to 118.7. The former was above the average, the latter was a touch below, but both remained within the range prevailing in recent years.
Consumers’ perceptions of their current financial situation dipped seven points to a net 9% feeling financially better off than a year ago.
A net 25% of consumers expected to be better off financially this time next year, down 10 points.
A net 37% said it was a good time to buy a household item, down two points.
Ms Zollner said the result was still strong and looked good for durables spending.
Perceptions regarding the next year’s economic outlook fell a sharp 12 points to 13%, back to its December low.
The fiveyear outlook eased seven points from 25% to 18%, the lowest since May last year.
Confidence fell in every region. Wellington remained the most confident region and Canterbury’s confidence fell 13 points to become the weakest.
‘‘Consumer confidence has dipped and the catalyst is not immediately clear,’’ she said.
‘‘The fall appears to reflect increased wariness of what the future may bring. Perceived current conditions remain strong.’’
The confidence composite gauge, which combines business and consumer sentiment and covers both the production and spending sides of the economy, was consistent with economic growth of between 2% and 3%.
❛ Consumer confidence has dipped and the catalyst is not immediately clear ANZ chief economist Sharon Zollner