ANZ-Roy Morgan New Zealand Consumer Confidence fell slightly from 94.6 to 92.4 in October, giving up last month’s gains

Key points

• The proportion of households thinking it’s a good time to buy a major household item (the best retail indicator) fell from -11 to -14. This indicator hasn’t been positive in more than four years.
• Inflation expectations lifted from 4.8% to 5.1%.

Turning to the detail (see charts on page 4 of the linked PDF):

• The future conditions index made up of forward-looking questions eased from 99.0 to 97.0, but is much higher than the current conditions index (85.5), which eased a similar amount.
• Perceptions of current personal financial situations (better or worse off than last year) eased 2 points to -15% with just over a quarter of respondents, 27% (down 5% points) now saying they are 'better off' financially than this time last year compared to a plurality of 42% (down 2% points) who say they are 'worse off'. The net result of -15% is not far off the average of the year thus far.
• A net 9% of respondents expect to be better off this time next year, down 5 points with 39% (down 4% points) of respondents saying they expect to be 'better off' financially this time next year compared to 30% (up 1% point) that expect to be 'worse off'.
• A net 14% think it’s a bad time to buy a major household item with just under a third, 31% (down 4% points) of respondents saying now is a 'good time to buy' major household items compared to a virtually unchanged 45% that say it's a 'bad time to buy' , suggesting caution continues, though our card spending data shows a pickup.
• Perceptions regarding the economic outlook over the next 12 months lifted 1 point to -22%. The 5-year-ahead measure fell 2 points, but is much more positive at +4%.
• House price inflation expectations lifted from 2.5% to 3.1%.
• Two-year-ahead CPI inflation expectations rose from 4.8% to 5.1%, close to actual food price inflation of 4.6%, but much higher than CPI inflation of 3%. In recent years there has been a strong negative correlation between inflation expectations and confidence.

ANZ New Zealand Roy Morgan Consumer Confidence hasn’t budged even as many other economic indicators have improved from their mid-year lows. The reluctance to spend in recent years has hit the retail sector hard. Figure 2 in the linked PDF shows the net percentage of consumers saying it’s a good time to buy a major item versus the net percentage of retail firms in the ANZ Business Outlook survey who say that their activity is higher than a year ago. Of late, retail businesses have reported a more mixed performance, but the current trend is upward. Meanwhile, consumers’ reported willingness to buy has been more stable.

Check out the latest data of ANZ-Roy Morgan New Zealand Consumer Confidence here: ANZ-Roy Morgan New Zealand Consumer Confidence

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