ANZ-Roy Morgan New Zealand Consumer Confidence slipped further in November, but remains above its historical average. The current conditions index rose slightly; future conditions fell. Consumers appear to be looking through housing headwinds and the recent period of political uncertainty, seemingly happy to go with the flow, but with a cautious eye to the future.
- ANZ-Roy Morgan New Zealand Consumer Confidence slipped further in November, but remains above its historical average.
- The current conditions index rose slightly; future conditions fell.
- Consumers appear to be looking through housing headwinds and the recent period of political uncertainty, seemingly happy to go with the flow, but with a cautious eye to the future.
New Zealand consumers appear to be just getting on with it.
The ANZ-Roy Morgan New Zealand Consumer Confidence Index eased from 126.3 to 123.7 in November. While that is a seven month low, overall sentiment is still tracking above historical averages.
The Current Conditions Index rose 0.6 points to 124.6, while the Future Conditions Index fell 4.6 points to 123.2.
- Consumers continue to feel happy about their current financial situation. A net 15% feel financially better off than a year ago, which is unchanged on October. This measure has bobbed around healthy levels for the last 12 months.
- But there is a little more unease about the year ahead. A net 29% of consumers say they expect to be better-off financially this time next year. That is down 5ppts on October and the lowest since August 2016.
- A net 34% still believe it’s a good time to buy a major household item. House price growth has fallen, which would typically impact spending on big-ticket items. Consumers appear undeterred for now.
- Perceptions on the economic outlook fell. Net optimism towards the economy one year ahead fell 7ppts after a 5ppt drop in October. The five year outlook dipped from a net +25% to +23%.
- Confidence is highest in Wellington (128.8), and lifted in Auckland (up 2.8 points to 126.3). However, the other centres saw reasonable falls, with Canterbury and the rest of the South Island down 7 and 8 points respectively. Confidence is lowest in regional North Island (118.9).
On many levels it is encouraging that headline consumer sentiment is still holding at reasonable levels. Yes it is off its highs, but at a time of far more subdued housing market activity (and far more subdued house price expectations), petrol price increases, lower NZD (making that overseas trip a little more expensive), and heightened political and policy uncertainty, one could have been forgiven for thinking that consumers would be more inclined to go into their shells. Clearly, the strong labour market should not be discounted as a powerful supportive force.
But scrape below the surface, and a number of cross-currents become apparent.
Whether that is the divergence between respondents’ views on their own financial situation (still okay) and their views on the broader economy (a little more cautious), or movements at the regional level (higher in Wellington and Auckland, but weaker elsewhere), or even the fact that males are the least confident they have been in the future for close to two years, while females are the most optimistic they have been in nearly four years, and it becomes clear that there are a number of moving parts.
In many ways this is indicative of how the economy itself is placed right now.
Overall, our confidence composite gauge (which combines business and consumer sentiment, and so covers both the production and spending sides of the economy) continues to indicate good economic momentum overall.
However, with the economy transitioning in terms of its growth drivers (construction and migration have peaked, while the likes of commodity prices and fiscal stimulus should eventually fill the void), at the same time as it grapples with headwinds from the soft housing market, late cycle capacity pressures and the uncertainty that political change can bring, it is clear there are a number of broader cross-currents to be aware of. The overall economic story still seems reasonable right now, but it is fair to say it has become a little more nuanced.
Click here to download the latest ANZ-Roy Morgan New Zealand Consumer Confidence Release PDF - November 2017.
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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.