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ANZ-Roy Morgan New Zealand Consumer Confidence - up 0.8pts to 127.7

ANZ-Roy Morgan New Zealand Consumer Confidence lifted 1 point in February. Consumers are feeling good. The current conditions indexes fell back from its 10-year high, but this was offset by a lift in the future conditions index.
ANZ-Roy Morgan New Zealand Consumer Confidence lifted 1 point in February. Consumers are feeling good.

  • The current conditions indexes fell back from its 10-year high, but this was offset by a lift in the future conditions index.

  • The strong labour market and stabilisation in the housing market are supporting consumer sentiment.

Consumers are feeling positive. The ANZ-Roy Morgan Consumer Confidence Index lifted from 126.9 to 127.7 in February. This is still 2 points off the September high, but it is a solid level. On a seasonally adjusted basis the index remains 8 points off its September high at 124.7.

ANZ-Roy Morgan New Zealand Consumer Confidence Rating - February 2018 - 127.7

After surging 8 points last month the Current Conditions Index fell 4 points in February to 127.3. The Future Conditions Index lifted another 4 points to 128.0 and has largely unwound its post-election dip.

  • Consumers continue to feel content about their current financial situation. A net 15% feel financially better off than a year ago. The proportion of those who reported being worse off was the lowest in the history of the survey.

  • A net 34% of consumers expect to be better off financially this time next year (up 5 points).

  • A net 40% say it’s a good time to buy a major household item, down 7 points. This is still a strong level and should support durables spending.

  • Perceptions regarding the economic outlook were steady at +21%. The five-year outlook lifted from a net +22% to +29%.

  • Confidence lifted 6 points in Wellington and 3 points in regional North Island, but fell in the South Island. Auckland confidence was little changed. Wellington and the South Island ex-Canterbury are vying for top spot.

  • National house price expectations lifted from 2.9% to 3.1% and are strongest in the regional North Island (3.8%). Inflation expectations continue to meander in a 3-4% range.

ANZ-Roy Morgan New Zealand Consumer Confidence is at robust levels. We suspect one has to look no further than the tight labour market to explain why. The outlook for household incomes is good, with both the record-high terms of trade and slightly higher wage growth set to support. With the housing market seemingly having found a floor, downside risks have receded. The gap that opened up last month between responses to the current-situation and forward-looking questions closed in February.

Our confidence composite gauge (which combines business and consumer sentiment, and so covers both the production and spending sides of the economy) has taken a hit from the fall in business confidence, but robust consumer confidence is supporting it. It is consistent with 2-3% GDP growth, which is respectable for this stage of the cycle.

Indeed, while we are predicting more modest activity growth as capacity constraints bite, we believe this economic cycle has legs yet. Strong commodity prices are boosting exporter incomes, and the strong labour market and government policy are supporting household incomes. With household debt at a record high as a proportion of those incomes, it’s perhaps just as well.

ANZ-Roy Morgan New Zealand Consumer Confidence Rating - February 2018 - 127.7

Click here to download the latest ANZ-Roy Morgan New Zealand Consumer Confidence Release PDF - February 2018.


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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.