The ANZ-Roy Morgan Consumer Confidence Index rose 2 points to 118 in August, unwinding some of last months’ 6-point fall. The Current Conditions Index rose 1 point to 127, while the Future Conditions Index lifted 2 points to 112.
- Consumers’ perceptions of their current financial situation rose 4 points to a net 16% feeling financially better off than a year ago.
- A net 27% of consumers expect to be better off financially this time next year, a solid 6 point bounce-back versus last month.
- A net 39% think it’s a good time to buy a major household item, unchanged.
- Perceptions regarding the next year’s economic outlook were unchanged at a net 1% expecting conditions to worsen. The five-year outlook was unchanged at+11%.
- Improvements in confidence in Auckland and Canterbury led the lift in the index. The only region where confidence fell was the North Island excluding Auckland and Wellington.
- House price inflation expectations remain weakest in Canterbury (1.5%) and are strongest in the rest of the South Island (3.8%). General inflation expectations were little changed at 3.2%.
Consumer confidence rose 2 points in August to 118, not far below its historical average of 120. Confidence in both current and future conditions lifted, but consumers continue to be more sure about the here and now.
Households are feeling relatively robust at the moment. Low interest rates are set to provide another support. A key downside risk over the year ahead is that employment indicators have deteriorated: employment intentions out of key business surveys (ANZBO, QSBO, PMI) and job ads. While the labour market is undeniably tight at the moment, that appears set to change.
For now, however, the proportion of people who think it’s a good time to buy a major household item remains high, which is good news for retailers.
Our confidence composite gauge combines business expectations and intentions with overall consumer sentiment to capture both the demand and supply side of the economy and give a better indicator for growth than either series alone.
The composite remains within recent low ranges, in line with our pick that while economic growth slowed this year it is finding a floor. We expect that the 50bp OCR cut delivered in August will filter through to consumers in time which should lift confidence, as long as the labour market holds up.
Click here to download the latest ANZ-Roy Morgan New Zealand Consumer Confidence Release PDF - August 2019.
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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.
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