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ANZ-Roy Morgan New Zealand Consumer Confidence down slightly in July to 125.4

Consumer sentiment eased in July, but remains at a strong level overall. Once we adjusted for seasonality, confidence lifted to the highest level since September 2014. Both point to a healthy pace of spending-based activity. House price expectations cooled further, especially in Auckland.
SUMMARY

  • Consumer sentiment eased in July, but remains at a strong level overall.

  • Once we adjusted for seasonality, confidence lifted to the highest level since September 2014.

  • Both point to a healthy pace of spending-based activity.

  • House price expectations cooled further, especially in Auckland.

Consumer sentiment still had a spring in its step in July. The ANZ-Roy Morgan Consumer Confidence Index eased from 127.8 to 125.4; that’s still the second highest result in the past five months. It also remains well above its long-run average of 119. Once we adjust for the seasonality at this time of year as the cooler months often bring the same for sentiment, the index rose one point to its highest level since September 2014.

ANZ-Roy Morgan New Zealand Consumer Confidence Rating - July 2017 - 125.4

In terms of the details, the Current Conditions Index fell 4 points to 124.9 while Future Conditions dipped 1 point to 125.8. Again, the story was stronger in seasonally adjusted terms, with current conditions only falling 2 points and future conditions rising 3.

  • Consumers’ view of their own financial position tip-toed from +14 to +10. Views regarding their own financial situation in 12 months’ time were little changed at +32 (+33 previously).

  • A net 39% believe it’s a good time to buy a major household item. That’s down from 45% in June but still high.

  • Perceptions towards the economic outlook remain strong. Net optimism towards the economy one year out dipped from +25 to +23, which is neither here nor there, and when assessing the five-year economic outlook, optimism held at +23, which is well above the average since 2015.
Consumers’ have a lot to smile about. The labour market is strong; the unemployment rate is low (and falling) and we are detecting more anecdotes of rising wage pressures – something that has clearly been missing for a number of years. Petrol prices have plunged and competitive pricing pressures in the retail sector remain, allowing the marginal dollar earned to go further. The Budget put $2 billion on the table for families and pork barrel politics is rampant as the election looms.

A slowdown in the property market is proving to be no Achilles heel. Auckland is bearing the brunt of the housing slowdown although the decline in prices since January (down 4%) needs to be put in context following a 77% surge over the prior five years. That’s not much more than a drop in the bucket. Consumer confidence in Auckland remains elevated. Outside of Auckland, house prices are performing better (rising 3% since January), although the regions didn’t see anywhere near the same degree of surge over the prior five years. There is close concentration between the most confident region (Canterbury 126.8) and lowest (South Island excluding Canterbury 122.7). So house prices, or the divergent performance, are not having much of an impact.

Consumers’ are more upbeat in New Zealand than Australia. The equivalent survey in Australia has consumer confidence at 113.0 compared to 125.4 here. There’s been a gap in New Zealand’s favour for 4 years now. It is little wonder the migration exodus to Australia is not what it was.

Elevated consumer confidence points to an economy bopping to a steady metronome. Our confidence composite gauge (which combines business and consumer sentiment, and so covers both the production and spending sides of the economy) continues to flag very good economic momentum.

ANZ-Roy Morgan New Zealand Consumer Confidence Rating - July 2017 - 125.4

Click here to download the latest ANZ-Roy Morgan New Zealand Consumer Confidence Release PDF - July 2017.


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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.