New Zealand consumers continue to tick along. The ANZ-Roy Morgan Consumer Confidence Index rose 2 points in April to 120.0, a smidgen above the historical average. This continues a theme evident since the start of the year, of sentiment remaining broadly stable at a respectable level. There is little sign that local consumers are ready to clock-off.
New Zealand consumers continue to tick along.
- Consumer sentiment remains elevated.
- Buoyant sentiment is a positive sign for spending trends.
- Nationwide house price expectations are rising once again, led by none other than Auckland.
The ANZ-Roy Morgan Consumer Confidence Index rose 2 points in April to 120.0, a smidgen above the historical average. This continues a theme evident since the start of the year, of sentiment remaining broadly stable at a respectable level. There is little sign that local consumers are ready to clock-off.
It is a similar message within the survey detail, with little to be alarmed about:
- Consumers continue to feel better off financially. A net 8% feel better off compared to a year ago, which is broadly where it has held for four months now. A net 28% are positive regarding the next 12 months, similar to last month (+29).
- Net optimism regarding the short-term economic outlook (+9) fast-forwarded to a five-month high. Optimism about the longer-term outlook was unchanged, but at a higher net balance than short-term expectations (+17).
- A net 38% believe it is a good time to buy a major household item. That’s up 4 points from March, perhaps reflecting recent NZD strength.
- The Current Conditions and Future Conditions indices both rose 2 points, to 123.2 and 117.8 respectively. Chime in if you’re worried, but this suggests you shouldn’t really be.
- In seasonally adjusted terms, it was a mixed regional picture. Confidence fell in Wellington, Christchurch and the regional South Island, was broadly unchanged in Auckland (where confidence levels were the highest), but rose in the regional North Island.
If they wanted to, there are a number of things that consumers could get wound up about. The dairy sector faces a daunting period of ongoing poor returns and an intense focus on costs. The adjustment has much further to go. Those wanting to get onto the housing ladder will be looking at recent price growth with despair. It is the same for savers, given ongoing falls in interest rates. Those close to retirement may need to reassess future work/leisure plans. And for those still with many years to go in the workforce, while technology comes with massive opportunities, it is resulting in phenomenal change across a number of industries; job security and wage growth is suffering as a result.
But consumers continue to just get on with it like clock-work.
The economy is still performing well, outside of dairying. The unemployment rate is falling and labour demand is strengthening. While it is tough for first-home buyers, existing property owners are benefiting from perceived wealth gains, which is a positive for spending outcomes. Lifting house prices simply add to the feel-good factor, which is also being boosted by lower interest rates. Equities have likewise surged. And although nominal wage growth is low, low inflation and the competitive retail environment mean that the marginal dollar is going further.
Is slower growth a question of time? Our Confidence Composite
(which combines both consumer and business sentiment) flags good times are still ahead.
It is suggesting GDP growth of 3% for 2016. While that is off earlier highs, it is still a solid signal overall.
Click here to download the latest ANZ-Roy Morgan New Zealand Consumer Confidence Release PDF - April 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.