At 118.0 the index is down a smidgen on February (119.7), but in line with the historical average. Sentiment has been oscillating in a reasonably narrow range over the past six months after coming out of a chocolate dip – another sign the economy is still in reasonable nick. We are neither shell-shocked nor egg-static.
Key insights from the survey include:
There are a host of reasons for people to remain sunny side up.
- Consumers are feeling better off compared with a year ago and this optimism is broadly unchanged on the month prior (+8 versus +9). Perceived wealth is a critical influence on spending decisions. It’s moving up and flags the same for spending. Encouragingly, consumers expect to be even better off 12 months down the track (+29).
- A net 34% believe it is a good time to buy a major household item. That is down 6 points from February, but still elevated.
- Respondents’ optimism over the short-term economic outlook slipped 5 points to a five-month low. But at +3, it’s still in positive territory. There is still more optimism on the longer-term outlook (+17).
- The Current Conditions Index dipped 3 points to 120.8. That’s still above the historical average of 115, helping to keep wallets open.
- The Future Conditions Index eased ever so slightly from 116.7 to 116.2 and sits below the long-term average.
- Confidence rose in all regions apart from Auckland (in seasonally adjusted terms), with overall sentiment the most positive in Wellington and Canterbury.
However, there are whisks we can’t egg-nore.
- Unemployment has fallen; employment is up.
- House prices are rising and the regions are now the pace-setters; wealth is a key variable driving spending decisions.
- The economy is still doing okay, as long as you don’t run a dairy farm.
- Interest rates keep pushing lower.
- Inflation is low; the price of technology-based products keeps falling. Everyday items (toasters, microwaves, TVs) are the new commodities; you don’t repair them – they have a limited life-span and are simply replaced.
Petrol prices have started to move back up. Global economic news is about as upbeat as a coroner’s retirement speech. New Zealand is heavily egg-sposed to global shifts and commodity prices, such as dairy; ripple effects will occur. Employment may be up, but wages are not moving by much. Technology is bringing egg-straordinary opportunity but also job uncertainty. Low(er) interest rates are great for borrowers, but what about the savers, or those headed into retirement? Suddenly the nest-egg looks decidedly hollow.
Net on net, consumers seem to think things are okay. We concur.
The economy is hopping along at a reasonable pace. Not too slow, nor too fast. And importantly, it’s a speed that is more sustainable for longer-term prospects.
Our confidence composite (combining both consumer and business confidence) continues to point to respectable prospects
for the economy heading into 2016. While it may not be a strong rate by historical standards, it’s a pace of growth that will remain the envy of many countries around the globe. Though to be fair, on a per capita basis, there is less to get egg-cited about.
Click here to download the latest ANZ-Roy Morgan New Zealand Consumer Confidence Release PDF - March 2016.
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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.