Consumer sentiment eased in December but the economic signals remain healthy. Strong levels of confidence flag a continuation of solid growth across the economy. Last month’s earthquake doesn’t appear to have had a material impact. Wellington is the most upbeat region.
Consumer optimism continues to go the distance.
- Consumer sentiment eased in December but the economic signals remain healthy.
- Strong levels of confidence flag a continuation of solid growth across the economy.
- Last month’s earthquake doesn’t appear to have had a material impact.
- Wellington is the most upbeat region.
The ANZ-Roy Morgan Consumer Confidence Index eased from 127.2 to 124.5, with the seasonally adjusted series showing a similar pull-back. Both movements are a marginal tweak from levels of excellence – consumers are still in ring-side seats.
The Current Conditions and Future Conditions Indexes fell 2 and 3 points respectively
. The levels for both (Current Conditions 125.1; Future Conditions 124.1) remain very buoyant. In terms of the details:
Pound-for-pound there is a lot for consumers to be happy about.
- Indicators for concurrent spending continue to stick and move. A net 13% feel better off compared with a year ago, the same reading as last month. Consumer enthusiasm towards buying major household items fell from +42 to +38, hardly a slap. As concurrent spending indicators, both augur well for the Christmas retailing period.
- Forward-looking indicators are rolling with the punches. Net optimism towards the economy in 1 and 5 years’ time fell to a net 22% (down 1) and 18% (down 10) respectively. The fall in the latter appears large but it just unwinds last month’s jump. Respondents’ views towards their own financial situation in 12 months’ time lifted to a net 32% (up 1).
- Wellington was top contender for the second month in a row.
There are jobs aplenty; our job ads series has been rising all year. The unemployment rate has fallen to 4.9%. Wage growth might be subdued but with little inflation, purchasing power is still moving up. Dairying incomes are on the comeback trail. The housing market may be showing signs of levelling out of late but property-owning households have still been given a huge wealth boost over the past year.
Our confidence composite gauge
(which combines business and consumer sentiment) is pointing to GDP growth accelerating to north of 4%
. Capacity constraints (getting skilled labour) will put a dampener on that but we like the spirit.
A stiff upper-cut from last month’s earthquake doesn’t appear to have had a material impact
. Confidence in both Wellington and Canterbury was down but there was no glass jaw on show and the move was not out of step with the rest of the country.
Click here to download the latest ANZ-Roy Morgan New Zealand Consumer Confidence Release PDF - December 2016.
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You can also view our monitor of Quarterly New Zealand Unemployment & Under-employment Estimates.