ANZ-Roy Morgan New Zealand Consumer Confidence up 7.2pts to 104.5 in June

Consumer confidence bounced nearly 8 points in June to 104.5, but is still well under its historical average.

• The net proportion of households who think it’s a good time to buy a major household item lifted 20 points to +5%, still recessionary levels.
• The bounce is encouraging, but with unemployment set to rise sharply we need to be realistic about how much spring is likely left.

The ANZ-Roy Morgan Consumer Confidence Index recovered further in June. It has made back about half its fall, but is around 2009 levels.

Turning to the detail:

• Consumers’ perceptions of their current financial situation lifted 4 points to +4. The wage subsidy scheme and lower interest rates have countered job losses, but this remains a subdued level.
• A net 32% of consumers expect to be better off financially this time next year, up another 9 points – that is a full bounce-back but of course the bar for improvement is lower.
• A net 5% think it is a good time to buy a major household item, back in the black after a big bounce but unfortunately still recessionary. 
• Perceptions regarding the next year’s economic outlook lifted another 9 points but remains very low at -37%. The five-year outlook broke with the pack, falling 5 points to 19%.
• House price inflation expectations rebounded to 0.9%, but remain negative in the South Island, reflecting its tourism exposure. General inflation expectations were unchanged at 2.9%.

New Zealand consumers are feeling more confident as life returns largely to normal and realise just how lucky we are. We’re getting on with our lives. However, we’ve had a solid dousing of cold water. Many people are worried about their jobs (or have lost them already), and the housing market is expected to be weak (figure 2). Willingness to buy major household items has bounced enormously off its lockdown lows, but remains at the levels prevailing in the last recession – hardly a period that retailers recall with fondness. The current flurry of spending as households spend their involuntary lockdown savings (and international holiday budgets) is likely to peter out relatively soon.