ANZ-Roy Morgan New Zealand Consumer Confidence up 4.3 pts to 92.2 in August

ANZ-Roy Morgan New Zealand Consumer Confidence was up 4.3 points in August to 92.2. At 92.2 it is still well below its 10-year average (109), but also well off its lows. Both the current and future conditions indexes lifted, the latter by more.

• Inflation Expectations ticked 0.1% pts higher to 3.8%. Expected house price inflation lifted from 2.4% to 2.8%.

Turning to the detail (for charts see page 5 of the linked PDF):

• The future conditions index made up of forward-looking questions rose 5 points from 95.7 to 100.5. The current conditions index lifted 2 points but remains much more subdued at 79.7. This strong contrast between the here and now and expectations of the future mirrors the themes from yesterday’s Business Outlook survey, and is typical of turning points in the economy.

• Net perceptions of current personal financial situations were unchanged at -18% in August with 41% (unchanged) of New Zealanders who say they are 'worse off financially' than this time a year ago compared to 23% (unchanged) who say they are 'better off financially'.

• A net 17% of New Zealanders now expect to be 'better off financially' this time next year, down 3 points from a month ago and this includes 41% (down 2% points from a month ago) who expect to be 'better off financially' compared to 24% (up 1% point) who expect to be 'worse off financially'.

• A net 23% of New Zealanders now think it’s a 'bad time to buy a major household item', an improvement of 7 points from a month ago but still very low and this includes exactly half of New Zealanders, 50% (down 2% points from a month ago) who say it is a 'bad time to buy major household items' compared to 27% (up 5% points) who say it is a 'good time to buy major household items'.

• Net perceptions regarding New Zealand's economic outlook in 12 months’ time lifted 14 points to -18% in August. The 5-year-ahead measure rose 4 points to a net rating of +3%.

• House price inflation expectations rose from 2.4% to 2.8% year-on-year, with a particularly sharp lift in the South Island excluding Canterbury.

• Two-year-ahead CPI inflation expectations were little changed at 3.8%. Households typically overestimate the rate of inflation.

News headlines were mixed for consumers this month – how one feels about headlines along the lines of “interest rates are dropping earlier than expected because the economy is so weak” will depend on one’s debt levels versus personal job security. Looking at how confidence evolved over the month (in light of the RBNZ rate cut on 14 August), there was no significant difference in overall confidence in the early and later samples, but it was notable that confidence was higher in the second half of the month for those paying off mortgages, but lower for renters.

ANZ-Roy Morgan New Zealand Consumer Confidence remains quite subdued, as any retailer could tell you, particularly those selling discretionary or durable goods. Our Business Outlook survey yesterday showed retailers are hopeful of better times ahead, but consumers are going to take a bit more convincing to spend.

Check out the latest data of ANZ-Roy Morgan New Zealand Consumer Confidence here: ANZ-Roy Morgan New Zealand Consumer Confidence

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