The economy still has a ticket to ride; consumer confidence is down, but the level remains very respectable and healthy. We can see signs of moderation across the indicators we track, but it’s drawing a long bow to conclude something ominous is around the corner. The risk profile is shifting but solid GDP growth remains on offer as a central view, and consumer sentiment is reasonably perky. Let it be.
ANZ-Roy Morgan New Zealand Consumer Confidence dipped in May but “I feel fine”.
- The economy still has a ticket to ride; consumer confidence is down, but the level remains very respectable and healthy.
- We can see signs of moderation across the indicators we track, but it’s drawing a long bow to conclude something ominous is around the corner. The risk profile is shifting but solid GDP growth remains on offer as a central view, and consumer sentiment is reasonably perky. Let it be.
- House price expectations hit a new high. Next month’s reading could be telling given recent signs policymakers, including the taxman, are serious about quelling demand.
The ANZ-Roy Morgan Consumer Confidence Index eased 5 points from 128.8 to 123.9. That compares with a long-term average of 117.9 so confidence is still a case of “good day sunshine”. Stripping out seasonal noise, the index showed a 3 point fall but remained well above historical averages.
We can see signs of moderation across the economy but we can work it out.
- Getting better: a net 7 percent believe they are financially better off compared to last year. That’s down 5 points on the month prior but still in positive territory. People don’t spend when they feel financially worse off.
- She’s leaving home: it’s still perceived as a very good time to buy a major household item (+42, down from +49). This series has sat around 40 for the past year in general.
- Here comes the sun: the forward-looking gauges (views about the economy and one’s own financial situation down the track) were either unchanged or down marginally but remain at respectable levels. The Future Conditions Index eased from 127.8 to 123.4.
- Get back: The Current Conditions Index (a concurrent indicator of spending trends) fell from 130.3 to 124.6; still reasonably elevated.
Consumer Confidence, Job Ads and our Truckometer are all decelerating from highs, but it’s a natural transition as the expansion matures from strong growth off lows to moderate growth off a higher level. As the business cycle matures and people with the right skills become harder to find, employment growth moderates too. We can identify hot-spots including Auckland house prices and mixed influences on household cash-flow (recent lifts in petrol prices versus pending lower ACC levies and continuing falls in fixed mortgage interest rates), but also pending risks, including a massive income hole across the regions courtesy of a low dairy payout.
The past year has seen the Current and Future Conditions measures move closer together
– this dynamic is symptomatic of an economy converging on a more modest pace of expansion. We continue to pencil in 3% real GDP growth over the year ahead, featuring modest employment growth and the same for consumption and retailing.
Click here to download the full ANZ-Roy Morgan New Zealand Consumer Confidence Release PDF - May 2015.
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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.