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ANZ-Roy Morgan New Zealand Consumer Confidence down to 117.7 in August (down 0.5pts)

Consumer sentiment barely budged in August, remaining elevated. The survey continues to point to an allongé economic expansion. Consumers remain upbeat about their current conditions, though appear more cautious towards the future. House price expectations eased back, most notably in Auckland.
SUMMARY

  • Consumer sentiment barely budged in August, remaining elevated.

  • The survey continues to point to an allongé economic expansion.

  • Consumers remain upbeat about their current conditions, though appear more cautious towards the future.

  • House price expectations eased back, most notably in Auckland.

The ANZ-Roy Morgan Consumer Confidence Index dipped a smidgen in August from 118.2 to 117.7. Our seasonally adjusted estimate showed a small rise. So we still have a picture of aplomb.

ANZ-Roy Morgan New Zealand Consumer Confidence - August 2016 - 117.7

The clearest trend in confidence across the sub-questions that make up consumer confidence is the lack of one. Confidence is down from its highs, but to extrapolate that into a trend is a bit of a leap.

  • Consumers feel better off financially today, which is a good sign for allégro-style spending tomorrow. A net 11% feel better off compared to a year ago, up a touch on last month’s reading of +9 (our seasonally adjusted estimate went from +11 to +12).

  • The ballerina at the ball remains consumers’ enthusiasm to buy a major household item, which stands at a net 37%. That’s elevated, but not surprising with the strong NZD keeping prices low.

  • Forward-looking indicators continue to wax and wane. A net 25% expect to be better off financially in 12 months’ time, down 4 points on the month prior. Net optimism regarding the short-term economic outlook was up, but confidence regarding the long-term economic outlook was down. Movements were largely seasonal.

  • The Current Conditions Index rose from 122.5 to 124.3, while the Future Conditions Index eased from 115.5 to 113.4. The former sits above “the centre” (average) while the latter is below. A softening in future conditions is not in itself something to worry about, but it does flag that consumers are increasingly of the view that this is as good as it gets.


The economic choreography looks respectable so it’s of little surprise to see consumer confidence holding at an elevated level. Unemployment has fallen to 5.1%. House prices are rising rapidly and it’s broad-based across regions. Inflation is low. A key risk to the economy – low dairy incomes – is being worked through, with global dairy prices showing welcome signs of recovery. A high NZD remains a boon for consumers, though it’s a headwind for exporters.

The economy is caught between adagio and allégro. Our confidence composite gauge (which combines business and consumer sentiment into one gauge) continues to flag a solid-to-strong pace of GDP growth over the coming months. Three to four percent real GDP growth is on offer. That would mark the sixth year of economic expansion. It’s looking like an allongé economic cycle.

ANZ-Roy Morgan New Zealand Consumer Confidence Rating - August 2016 - 117.7

Click here to download the latest ANZ-Roy Morgan New Zealand Consumer Confidence Release PDF - August 2016.


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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.