Consumer confidence slips to 12-month low in October

Kiwi consumers remain more prudent with spending than before the global financial crisis, says ANZ. Photo / Paul Taylor

New Zealand consumer confidence fell to a 12-month low in October as households felt less cheery about the future, with economic growth coming off the boil.

The ANZ-Roy Morgan consumer confidence index fell 4.3 points to 123.4 in October to its lowest reading in 12 months, though still above its long-term average of 118.8. The current conditions index edged up 0.3 of a point to 124.4, while future conditions dropped 7.4 points to 122.8.

"Consumer and business confidence have eased from their highs," ANZ Bank New Zealand chief economist Cameron Bagrie said in his report. "Nonetheless, our composite confidence gauge (which combines both sentiment measures) is still projecting a strong economy into 2015."

The dip comes as the Reserve Bank signals a pause in its interest rate hiking cycle to assess the impact of its four increases this year, and as the pace of economic growth looks set to slow from a peak in the first half of the year.

See the latest consumer confidence survey here:

Today's survey shows households still feel better off financially, compared to a year ago, with a net 9 per cent of respondents more upbeat about their current position, compared to a net 10 per cent in September, and a net 32 per cent expect to be better off in a year's time, compared to 39 per cent a month ago.

Of the 1,017 people surveyed, a net 17 per cent predict New Zealand's economy will enjoy good times over the next 12 months, compared to 24 per cent in September, and a net 19 per cent are optimistic about the economy's five-year horizon, down from 27 per cent in September.

Households were largely upbeat about buying major appliances, with a net 40 per cent saying it's a good time, compared to 38 per cent in September.

Some 77 per cent of people surveyed predict interest rates to rise over the coming two years, at an annual pace of 3.7 per cent, and 70 per cent expect house prices to rise an annual 4.1 per cent over the next two years.