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ANZ-Roy Morgan New Zealand Consumer Confidence - Still Chirpy

Consumer sentiment remains elevated despite a slight dip in February. We’re not reading too much into the dip – though it is interesting that lower interest rates and petrol prices have not yet engendered the usual Pavlovian response. Buoyant levels of consumer sentiment augur well for the economic expansion. It can even be argued that a failure to respond to short-term stimulus augers even better going forward – if consumers were to cut loose and binge the RBNZ would be forced to spoil the party.
SUMMARY

  • Consumer sentiment remains elevated despite a slight dip in February.

  • We’re not reading too much into the dip – though it is interesting that lower interest rates and petrol prices have not yet engendered the usual Pavlovian response.

  • Buoyant levels of consumer sentiment augur well for the economic expansion. It can even be argued that a failure to respond to short-term stimulus augers even better going forward – if consumers were to cut loose and binge the RBNZ would be forced to spoil the party.

  • Auckland and Wellington showed the largest dips in confidence.
Consumers remained upbeat at the start of 2015. The ANZ-Roy Morgan Consumer Confidence Index eased a touch from 128.9 in January to 124.0 in February but we’re not reading too much into that – a 5 point move is well within the bounds of normal monthly noise and volatility. The level of confidence remains elevated.

Both the Current Conditions Index (a concurrent indicator of spending trends) and the Future Conditions Index eased in February.The current conditions index moderated from 126.8 to 123.0; that’s still consistent with solid rates of consumer spending. The future conditions index eased from 130.3 to 124.6.

All five components that make up consumer confidence waned in February, moving into less-positive territory. Households still perceive themselves as better off in terms of their finances, and still consider it a great time to buy a major household item. The three forward-looking gauges all dipped, but remain at healthy levels. Simply eyeballing the chart below shows confidence is sitting well above its nadir and in a pretty chirpy range.

ANZ-Roy Morgan New Zealand Consumer Confidence Rating - February 2015 - 124.0

Why the drop in confidence? Interest rates have moved lower, house prices are still moving up, jobs are relatively plentiful and lower petrol prices (though a tad higher of late) mean more discretionary money in the pocket. That would normally be a winning combination. The finger can be pointed at the following:

Noise; sentiment can wax and wane from month to month. Movements of less than 10 points are generally more noise than signal.

Seasonality; boo, we’re back at work. Stripping out the mild seasonal element showed confidence still dropped, but by a marginal amount.

Shifting attitudes; traditional cyclical stimulus is potentially a less relevant driver of household sentiment. Extra money in the pocket is more likely to be saved than spent. Households are no longer using house price gains as an ATM.

International gyrations; it’s been a fickle start to the year. Things are also delicate close to home, with Australia in the midst of grumpy growth; there is growth but it’s not the feel-good kind.

Our Composite Confidence gauge (which combines sentiment from both businesses and consumers) continues to ease from early 2014 peaks but the signal remains upbeat for growth going forward.

ANZ-Roy Morgan New Zealand Consumer Confidence Rating - February 2015 - 124.0

Click here to download the full ANZ-Roy Morgan New Zealand Consumer Confidence Release PDF - February 2015.


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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.