New Zealand consumer confidence rose in May, helped by a strengthening labour market that has driven unemployment to its lowest level in almost nine years, stoking optimism about people's finances even in the face of stagnant wage growth.
The ANZ-Roy Morgan NZ consumer confidence index rose 2.2 points to 123.9 in May, with the current conditions index gaining 4.6 points to 127.8 and the future conditions index edging up 0.4 of a point to 121.2.
Government data this week showed retail sales rose faster than expected, driven in part by cheap petrol and a relatively strong kiwi dollar keep import costs low. The strength of consumer spending over the past year has surprised the Reserve Bank. More recently, figures showed the unemployment rate fell to 4.9 per cent in the March quarter, the lowest level since December 2008, as employers took on more staff without having to raise wages.
Today's survey showed a net 16 per cent of the 1,000 respondents said their family finances were better than they were a year earlier, up from 9 per cent in April, and the highest level since the global financial crisis in 2008. A net 32 per cent expect to be better off in a year's time, down from 33 per cent in April. A net 39 per cent of respondents see now as a good time to buy, up from 37 per cent in April.
ANZ Bank New Zealand chief economist Cameron Bagrie said that was "positive for near-term spending momentum" and that "elevation remains the overriding story".
A net 17 per cent of respondents expect New Zealand's economy to be in a good place in 12 months, up from 14 per cent a month earlier, and a net 15 per cent see better times over the next five years, unchanged from April.
The survey respondents dialled back their inflation expectations, seeing an annual increase in consumer prices of 3.6 per cent over the next two years, down from 4 per cent in April, whereas house prices are seen rising 4.6 per cent, down from 5.2 per cent a month earlier.