ANZ-Roy Morgan New Zealand Consumer Confidence put its best foot forward in November, with an 8 point gain in the ANZ-Roy Morgan New Zealand Consumer Confidence Index, to 122.7, representing a six month high.
ANZ-Roy Morgan New Zealand Consumer Confidence put its best foot forward in November
- Consumer sentiment rose to a six month high in November.
- Rising ANZ-Roy Morgan New Zealand Consumer Confidence joins an array of other indicators that point to an economy expanding more briskly after a first half lull.
- Inflation expectations from the survey hit a four year high. House price growth expectations eased nationwide, led by Auckland.
, with an 8 point gain in the ANZ-Roy Morgan Consumer Confidence Index, to 122.7, representing a six month high.
Laying the platform was a band of brothers in the form of:
- Consumers being more upbeat about the economy. Consumers are feeling far more optimistic about the economic outlook over the year ahead (up 14 points to +15), with a 30 point turnaround seen since troughing in August. Sentiment regarding the economy’s performance five years ahead (note, that’s five years and not four more years) firmed 4 points to +21 – another six month high.
- A net 9% of respondents are feeling financially better off compared to 12 months prior. This improvement is expected to persist, with expectations for next year hitting a seven month high (+30).
- Those believing it is a good time to buy a major household item rose from +31 to +38, the highest level since June. Falling mortgage interest rates and the plateauing NZD are helping.
- The Current Conditions Index rose 8 points to 123.5 – the here and now is looking a whole lot better than it did a couple of months ago; that’s a good sign for spending trends heading into Christmas.
- The Future Conditions Index posted an 8 point gain to 122.2. An improving short-term economic outlook was the major driver.
- Confidence rose in all regions (in seasonally adjusted terms). While confidence is the highest in Canterbury, other regions are catching up.
There have been a number of phases in the ANZ-Roy Morgan New Zealand Consumer Confidence Rating this year. The start of the year saw confidence retreat from historically high levels. From about the middle of the year consumer confidence plateaued below historical averages, and spirits were generally low. The last few months have seen a turnaround, in what looks to be a well-timed run to Christmas.
Business sentiment has followed a similar trajectory.
It is not just the warmer weather contributing to the more positive vibe.
While our seasonally adjusted estimates show a slightly milder rise in overall confidence, the current conditions component recorded a larger increase.
When looking for catalysts, we could focus on that feel-good factor provided by the All Blacks’ World Cup feats. Full credit to the opposition etc, but the reasons for the uplift will be broader than that.
A raft of indicators now point to an economy back on-side after doing little with the ball in the first half. Consumers are picking up on this improving vibe. Low mortgage interest rates look to working their magic. While this is not great news for savers, it is a boon to borrowers provided they don’t completely lose the plot; borrow and spend style growth can only be a temporary phenomenon.
When combined with the rise in business confidence, our confidence composite points to a rebound in economic activity
, and suggests the economy will move beyond consolidation and into a strengthening phase in 2016. Amidst still challenging times for some sectors (dairy) and a slight lift in the unemployment rate, it foretells of an economy that is far broader than cows alone. Witness surging tourism inflows for example, with the sector set to outdo dairying as our largest source of export receipts over the year ahead.
In terms of the regional split
(using seasonally adjusted data), all regions experienced a lift in confidence for the second straight month (the chart below shows a three-month average). Canterbury consumers remain the most optimistic, but the most ground has been made up by the regional North Island. Auckland confidence is now in the middle of the pack, and while confidence in the capital is picking up, it remains the least optimistic overall.
Click here to download the ANZ-Roy Morgan New Zealand Consumer Confidence Release PDF - November 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.