Big cities drive up consumer confidence in latest survey

The ANZ-Roy Morgan consumer confidence index rose nearly six points to 107.2, indicating a positive outlook. Photo / Mark Mitchell

By RNZ

The ANZ-Roy Morgan consumer confidence index is up nearly six points this month to 107.2, with anything over 100 considered to be a positive outlook.

ANZ chief economist Sharon Zollner said mortgaged households were still cautious, although Aucklanders were much more positive, with Wellingtonians the most upbeat at 109 points.

“Consumer confidence has lifted again and is at its highest level in four years. In a long-term historical comparison, it’s still pretty average, but that’s positive compared to where confidence has been in recent years.”

She said the number of households thinking it was a good time to buy a major purchase was finally back in the black after lingering in negative territory for nearly four years.

“The housing market is going nowhere fast, but the steady improvement in consumer confidence seen in recent months will offer retailers hope that the pick-up seen at the end of last year will persist.”

The current conditions index rose sharply to 97.7 from 90.4, the highest since December 2021.

“Lifts in activity indicators suggest the economic recovery in the second half of last year came more quickly than expected, but with the low-hanging fruit now picked, rapid growth gets mathematically harder,” Zollner said.

Perceptions of current personal financial situations rose 12 points to a negative 6 per cent.

Still, a net 29% of respondents expected to be better off this time next year, the highest level in nearly five years.

The future conditions index made up of forward-looking questions rose to 113.5 points from 108.9, to the highest level since May 2021.

“There is a mix of headwinds and tailwinds facing the economy that in our view will add up to par growth this year,” Zollner said.

“Headwinds include rising interest rates, a stronger NZ dollar, high inflation in necessities, and uncertainty from the election and ongoing global turbulence.

“These are going up against tailwinds: interest rates are still estimated to be at stimulatory levels, private sector balance sheets are generally sound, and business confidence and investment and employment intentions are much stronger.”