Consumer confidence lifted in January, breaking a run of three consecutive declines. Consumers are feeling good. Both the current and future conditions indexes increased. The current conditions index is at the highest levels since 2007. The stabilisation in the housing market and the fact uncertainty surrounding the election has waned have perhaps cleared the path for a strong labour market to support consumer sentiment.
Consumer confidence lifted in January, breaking a run of three consecutive declines. Consumers are feeling good.
Consumers are feeling groovy.
- Both the current and future conditions indexes increased. The current conditions index is at the highest levels since 2007.
- The stabilisation in the housing market and the fact uncertainty surrounding the election has waned have perhaps cleared the path for a strong labour market to support consumer sentiment.
The ANZ-Roy Morgan Consumer Confidence Index lifted from 121.8 to 126.9 in January. This is still 3 points off the September high, but is a pretty robust level.
The Current Conditions Index rose a hefty 8.1 points to 131.3, its highest level since 2007. The Future Conditions Index lifted 3.0 points to 124.0.
Consumer confidence has bounced back as the housing market has stabilised and the uncertainty around the election has receded.
- Consumers continue to feel pretty content with their current financial situation. A net 16% feel financially better off than a year ago. This metric has been pretty stable for the last year or so.
- A net 29% of consumers expect to be better off financially this time next year (+1 point).
- A net 47% say it’s a good time to buy a major household item, up 15 points. Durables spending may be set for something of a comeback given the stabilisation in house price growth.
- Perceptions regarding the economic outlook improved from 13 to 21. It remains off its September high of +30 but it is encouraging that it has turned. The five-year outlook was steady at a net +22%.
- The increase in confidence was centred in the South Island, with double-digit lifts in both Canterbury and elsewhere seeing them the most confident regions of the country.
- National house price expectations lifted from 2.4% to 2.9% and are strongest in Wellington. Inflation expectations continue to oscillate in a 3-4% range.
The labour market is strong and the outlook for household incomes is solid, so it is hard to argue the optimism is unwarranted. That said, a hint of wariness in the responses to the forward-looking questions persists. This is consistent with our belief that the economy is experiencing a bit of a lull as a number of growth drivers run out of puff around the same time (migration, housing, and construction in particular).
Our confidence composite gauge
(which combines business and consumer sentiment, and so covers both the production and spending sides of the economy) has taken a hit due mostly to the fall in business confidence.
However, the economic cycle still has some legs, with a coordinated global growth upswing and strong terms of trade supporting the export sector, and the domestic sector buoyed by a strong labour market, expansionary fiscal policy, and still-low interest rates.
Click here to download the latest ANZ-Roy Morgan New Zealand Consumer Confidence Release PDF - January 2018.
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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.