Survey shows consumer conf idence plummeted

Consumer confidence predictably plummeted in April, according to a monthly survey conducted by ANZ.

The fall in the ANZ-Roy Morgan consumer confidence index saw sentiment among consumers drop to about where it was at the depths of the 2008 global financial crisis (GFC), the bank said.

ANZ chief economist Sharon Zollner said confidence had fallen off a cliff. ‘‘New Zealand consumers are feeling pretty alarmed.’’

A net 56 per cent of those polled expected the economic outlook to worsen over the year ahead, which was the most pessimistic people had been since the poll started in 2004. But only a net 4 per cent of consumers reported feeling worse off than they were a year ago.

A net 14 per cent of those polled expected to be better off financially this time next year. The latter figure was down only 3 percentage points on ANZ’s last survey in March.

Zollner said the small proportion of consumers reporting they were already worse off might reflect the support that had been provided to people’s incomes through wage subsidies. She was surprised people’s confidence about their finances in a year’s time hadn’t taken more of a hit.

People were deeply worried about the economy but seemed less concerned about their own personal financial situation, she said.

‘‘I do think there is a degree of optimism that the impacts on the New Zealand economy are going to be relatively short-lived because we are winning the battle against the virus. It is a lovely thought [but] I fear it might be a bit over-optimistic,’’ she said.

Data separately supplied to Stuff by the Companies Office shows there has not yet been an increase in companies folding or in personal bankruptcies, at least up until Tuesday.

The number of company liquidations fell to 68 during the first 28 days of April, down from 135 during the same period last year, while the number of companies going into receivership and administration doubled.

Personal bankruptcies dropped to 59 in the period from March 26 to April 29, down from 130 last year.

But officials said it was too early to detect trends caused by Covid-19 as insolvency registrations were likely to lag behind an economic downturn.

It would probably be a few months before the data became more informative.

The net proportion of respondents to ANZ’s survey who thought it was a good time to buy a major household item plummeted 67 points to negative 51 per cent.

Respondents’ average expectations for house price rises changed from expecting a 4.5 per cent price rise over the coming year, to expecting a 0.5 per cent increase.

‘‘Times have changed rapidly – job security is iffy or non-existent for many [and] the value of their largest asset is looking like flat-lining,’’ Zollner said.

Consumers were planning to keep their wallets firmly shut even once bricks and mortar retail and sit-down dining reopened, she said.

When put together with business confidence surveys, the data was consistent with ANZ’s forecast that the economic hit from Covid-19 would be considerably more significant than the GFC, she said.