Consumer, business confidence on the rise
CONSUMER confidence rebounded just in time for Christmas, coming off an October low to claw its way just a little above the historic average.
Underpinning the mood swing was likely the easing of fuel prices off record highs and continued low mortgage lending rates of recent months.
Both consumer and business confidence and their respective outlooks have been in the doldrums for the past six months, souring the Coalition Government’s business initiatives.
Three separate business surveys last week showed a positive upswing in sentiment, the last being the ANZ Consumer Confidence survey, released on Friday.
ANZ chief economist Sharon Zollner said consumer confidence and perceptions of current conditions both lifted three points and the future conditions index lifted four points.
‘‘The proportion thinking it is a good time to buy a major household item bodes well for spending in the leadin to Christmas,’’ Mrs Zollner said.
She said the economy’s momentum appeared set to slow, but with growth holding in a range of 2.5%3% for the foreseeable future, and consumption on a ‘‘steady path’.
That would be supported by a strong labour market, but capped by high household debt, Mrs Zollner said.
In last week’s separate Westpac McDermott Miller survey consumer confidence bounced back in the December quarter, completely reversing a sharp drop in the September quarter, The New Zealand Herald reported.
The turnaround in consumer sentiment followed the lift in business confidence picked up in the ANZ Business Outlook survey released earlier in the week.
‘‘The number of households who think now is a good time to make a major purchase has risen to its highest level in four years,’’ Westpac senior economist Satish Ranchhod said. ‘‘We’re also seeing a growing number of households increasing their spending on entertainment and dining out.’’
Through the middle part of this year, there had been a notable loss of optimism in the New Zealand economy, Mr Ranchhod said.
Two big factors were helping to boost spending appetites.
The first was the fall in petrol prices since the start of October, which had put money back into the pockets of many households.
Mortgage rates had also dropped since the last survey, and there had been a related firming in housing markets in some parts of the country, he said.
Consumer confidence in New Zealand strengthened in the December 2018 quarter, up 5.6 index points from 103.5 in the September quarter to 109.1 on the Westpac McDermott Miller Consumer Confidence Index.
All categories of consumers, with the sole exception of Waikato, were now optimistic about the outlook, McDermott Miller managing director Richard Miller said.
‘‘This quarter last year, consumer confidence in New Zealand fell sharply, with Auckland metropolitan consumers, in particular, uncertain about the mediumterm outlook for personal and household incomes following the 2017 election,’’ he said.
The ANZ Business Outlook, which has been notable for registering historically low levels of business confidence since the 2017 election, showed businesses’ expectations for their own outlooks on the mend. — Additional reporting: The New Zealand Herald