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ANZ-Roy Morgan New Zealand Consumer Confidence - Seven Year Itch

We’re still seeing elevated levels of consumer confidence. That’s tremendously encouraging given well-flagged prospects for interest rates to move up.
  • We’re still seeing elevated levels of Consumer Confidence. That’s tremendously encouraging given well-flagged prospects for interest rates to move up.

  • Confidence is spreading to all corners of the country.

  • Our composite growth indicator continues to flag the potential for very strong growth. We’re more conservative, siding with “strong” over “very strong”.

Consumer Confidence remains high. The headline figure actually retraced a tad in February (from 135.8 to 133) but that sort of movement is nothing more than noise. Our seasonally adjusted estimate showed a miniscule rise, hitting a seven-year high.


We’re encouraged by the continued elevated levels. It’s now well flagged that interest rates are set to move up – a typical bug-bear for sentiment. However, that dynamic looks to be being usurped by the combination of rising asset prices (namely house prices, albeit at a slowing rate of increase), firming employment prospects, more people participating in the labour force (the participation rate hit a five-year high in the December quarter), a falling unemployment rate, and reasonable income growth.

ANZ-Roy Morgan New Zealand Consumer Confidence - February 2014

Strong consumer sentiment typically flags the same for spending trends. But while consumer sentiment is strong, spending trends are more of a mixed bag. Retail sales are up 4 percent on a year ago. We’re seeing a pick-up, but it’s far from “all-guns blazing” spending euphoria. In contrast, credit card billings are up more strongly, and housing credit growth is tracking ahead of income growth – that’s adding to an already leveraged balance sheet and has sparked a response from the RBNZ in the form of loan-to-value ratio restrictions.

Such figures highlight what will be one of the key issues of 2014: have households truly reformed their borrow-and-spend ways? Or was consumer caution over 2008 to 2012 merely transitory? The evidence to date is mixed.

A pick-up in consumer spending – to be expected if Consumer Confidence trends are followed – is to be welcomed, provided it is supported by income generation
. That’s the realities of working with a savings rate of zero. Get the income-generating side right and spending trends can follow. The good news on this front is that job prospects are improving. Wage gains will follow. The durability, magnitude and frequency of wage rises will depend critically on productivity gains to make them affordable.

ANZ-Roy Morgan New Zealand Consumer Confidence - February 2014

Download the full ANZ-Roy Morgan New Zealand Consumer Confidence Release - February 2014.

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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 Monthly Australian Unemployment & Under-employment Estimates.