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ANZ-Roy Morgan New Zealand Consumer Confidence eases to 127.4 in February (down 1.3pts)

Consumer sentiment continues to shine brightly; the headline index eased a tad in February while the seasonally adjusted estimate lifted. Glowing consumer sentiment augurs well for spending trends and economic momentum. Inflation expectations and house price expectations were largely unchanged.

SUMMARY

  • Consumer sentiment continues to shine brightly; the headline index eased a tad in February while the seasonally adjusted estimate lifted.

  • Glowing consumer sentiment augurs well for spending trends and economic momentum.

  • Inflation expectations and house price expectations were largely unchanged.

The summer might have been sub-par but consumer confidence is showing lots of energy, tracking above average. The ANZ-Roy Morgan Consumer Confidence Index eased from 128.7 to 127.4 in February (average 118). It’s normal for confidence to ease in February as people go from holiday to work mode. Once we adjust for the seasonal aspect, consumer confidence luminescence lifted from 124.3 to 125.4.

ANZ-Roy Morgan New Zealand Consumer Confidence Rating - February 2017 - 127.4

The Current and Future Conditions Indexes eased back from elevated readings in January (by 2 and 1 points respectively). At 128.0 and 127.0 respectively, the levels for both indexes remain historically high. Seasonally adjusted moves were up. In terms of the details:

  • Indicators for near-term spending remain bright. A net 15% feel better off financially compared with a year ago. That’s the highest reading since early 2008. People tend to open the wallet when they feel better off. Consumer enthusiasm for buying major household items eased from +49 to +41 but has been oscillating around the 40 mark for three years.

  • Forward-looking indicators waxed and waned. Net optimism towards the economy 1 year out lifted from +25 to +26. Respondents’ views towards their own financial situation in 12 months’ time eased to a net 31% (down 3).

  • Elevated consumer confidence readings are apparent across all regions. Wellington is the most optimistic region, followed by Canterbury.

The economic landscape looks pretty radiant for consumers. A high NZD is keeping imported products cheap. Wage gains might be modest but income growth is still up 4.8% on a year ago, courtesy of strong employment growth. Household (and consumer) wealth / balance sheets have been given a huge fillip courtesy of house price gains (though slowing of late). Dairy sector incomes are on the recovery path. Interest rates have risen from their lows, potentially denting borrowers’ disposable income, but it’s supporting depositors and savers, a group often forgotten about.

Our confidence composite gauge (which combines business and consumer sentiment) continues to point to GDP growth accelerating north of 4%. We don’t think the economy has the anaerobic capacity to grow that fast (labour is becoming too hard to find), but the overall message is one of strong growth in prospect.

ANZ-Roy Morgan New Zealand Consumer Confidence Rating - February 2017 - 127.4 

Click here to download the latest ANZ-Roy Morgan New Zealand Consumer Confidence Release PDF - February 2017.


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Related Research Reports

The latest Roy Morgan Consumer Confidence Monthly Report is available on the Roy Morgan Online Store. It provides demographic breakdowns for Age, Sex, State, Region (Capital Cities/ Country), Generations, Lifecycle, Socio-Economic Scale, Work Status, Occupation, Home Ownership, Voting Intention, Roy Morgan Value Segments and more.

You can also view our monitor of Quarterly New Zealand Unemployment & Under-employment Estimates.