Kiwi con­sumers stay­ing pos­i­tive

Bay of Plenty Times - - BUSINESS -

New Zealand con­sumers were still in rea­son­able heart this month as con­cerns about the eco­nomic out­look sub­sided.

The ANZ Roy Mor­gan con­sumer con­fi­dence in­dex was un­changed at 117.6 in Septem­ber, hold­ing around its long-run av­er­age.

Op­ti­mism about their present sit­u­a­tion slipped with the cur­rent con­di­tions in­dex down 3.3 points to 120.2, while the out­look bright­ened as the fu­ture con­di­tions in­dex in­creased 2.2 points to 115.9.

“Per­cep­tions of cur­rent con­di­tions re­main strong, but there is some cau­tion about the fu­ture, par­tic­u­larly around the broader econ­omy rather than re­spon­dents’ own fi­nan­cial sit­u­a­tions,” ANZ Bank New Zealand econ­o­mist Liz Ken­dall said. “House­holds re­main a lit­tle cau­tious about the out­look but the gap ver­sus cur­rent con­di­tions has nar­rowed.”

Con­sumers have re­mained rel­a­tively up­beat de­spite slump­ing busi­ness con­fi­dence.

Firms are ner­vous about new reg­u­la­tory set­tings whereas low­in­come house­holds have re­ceived tar­geted Gov­ern­ment in­come sup­port.

Busi­ness con­fi­dence im­proved this month as Prime Min­is­ter Jacinda Ardern launched a charm of­fen­sive with a new work­ing group for firms to have her ear. Sen­ti­ment among firms is still weak.

Ken­dall said the com­pos­ite con­fi­dence gauge, which com­bines the two sur­veys, in­di­cates slow­ing eco­nomic growth. Gov­ern­ment data last week showed gross do­mes­tic prod­uct grew 1 per cent in the sec­ond quar­ter, beat­ing ex­pec­ta­tions.

“The head­winds are real. The growth drivers of house price ap­pre­ci­a­tion and pop­u­la­tion growth are fad­ing and com­mod­ity prices ap­pear to have peaked,” Ken­dall said.

“But mon­e­tary con­di­tions and fis­cal pol­icy are stim­u­la­tory and bar­ring a global shock we sus­pect the econ­omy will mud­dle through.”

The sur­vey showed con­sumers are less likely to buy ma­jor house­hold ap­pli­ances, with a net 29 per cent of the 009 re­spon­dents say­ing it’s a good time to buy, the low­est level in three years.

A net 12 per cent said they were bet­ter off now than a year ago, un­changed from Au­gust, while a net 27 per cent ex­pect to be do­ing bet­ter in a year’s time, up from 26 per cent.

Con­sumers were still cool on the wider eco­nomic out­look, with a net 4 per cent ex­pect­ing good times in the com­ing year com­pared to 2 per cent in Au­gust. A net 18 per cent an­tic­i­pate bet­ter eco­nomic con­di­tions over the next five years, up from 13 per cent.

In­fla­tion ex­pec­ta­tions were lower with prices seen ris­ing at an an­nual pace of 3.4 per cent over the next two years, down from 4 per cent in Au­gust, while an­nual house price in­fla­tion ex­pec­ta­tions were un­changed at 3.4 per cent.

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