New Zealand consumer confidence gained in the June quarter and reached its highest level since early 2015 as consumers were more upbeat about the economic outlook although they were slightly more jittery about the current economic situation.
The Westpac McDermott Miller consumer confidence index rose 1.5 points to 113.4 in the June quarter, above the long-run average of 111.4. A reading above 100 indicates optimists outnumber pessimists, and the survey has been above that level since March 2011. The present conditions index, however, slipped 0.7 points to 110.5 while the expected conditions index rose 3.0 points to 115.4.
A net 18.2 per cent of the 1,555 people surveyed between June 1 and June 11 expected the economy to improve over the coming year, up from 11.8 per cent in the March period, while a net 18.8 per cent see better times for the economy over a five-year period, up from 17.8 per cent in March.
"Households have become increasingly confident about the economic outlook," said Westpac Banking Corp acting chief economist Michael Gordon. He noted, however, "they are a little more nervous about current economic conditions" and this is being reflected in softer spending appetites. The number of households who think now is a good time to purchase a major household item eased 0.7 points to 19.4 per cent in the June quarter, below the long-run average of 26.3 per cent.
Softening spending appetites are likely to reflect the rise in borrowing rates over the past year and the related slowdown in the housing market - both of which are key determinants of household spending, said Gordon.
He noted that "such concerns are particularly pronounced in Auckland where the slowdown in the housing market has been most acute". However, even accounting for concerns about the current spending environment, households remain upbeat about overall economic conditions, he said.