Housing dents consumer confidence
New Zealand consumer confidence has dropped in the September quarter as the slowing housing market dented optimism about the future, although people felt more upbeat about their current financial situation.
The Westpac McDermott Miller consumer confidence index fell 1 point to 112.4 in the quarter, staying above the long-run average of 111.4.
A reading above 100 indicates optimists outnumber pessimists. The survey has been above that level since March 2011.
The present conditions index gained 1.8 points to 112.3 while the expected conditions index dropped 2.9 points to 112.5.
The survey showed that people’s view of their current financial situation had improved, up 3.8 points to a net 5.4 per cent better off from a year earlier, while their expected financial situation fell 3.7 points to net 5.6 per cent positive.
‘‘While consumer confidence has eased a little, households remain in good spirits,’’ Westpac chief economist Dominick Stephens said.
‘‘Although expectations for the coming year have softened, households remain fairly upbeat about the economic outlook.’’
A net 13.4 per cent of the 1553 people surveyed in the first 10 days of September expected the economy to improve over the coming year, down from 18.2 per cent in the June period
A net 18.6 per cent see better times for the economy over a five-year period, down from 18.8 per cent in June.
Westpac senior economist Satish Ranchhod said the fall in confidence in the latest quarter may reflect concerns about the slowdown in the housing market, which could become a more pressing concern due to record high levels of household debt.
The number of households who think now is a good time to purchase a major household item remained low, down 0.2 points to 19.2 per cent in the quarter, below the long-run average of 26.3 per cent and a five-year low.
However, spending on entertainment and leisure rose to a 10-year high. –AAP