Consumers are in higher spirits about the economy but confidence remains “very low” according to ANZ data released today. Photo / 123rf
Consumers are in higher spirits about the economy but confidence remains “very low” according to ANZ data released today. Photo / 123rf
Consumers are in higher spirits about the economy but confidence remains “very low” according to ANZ data released today.
ANZ-Roy Morgan’s consumer confidence index jumped to 85.5 in June, the highest read since last January, up 6 points on last month.
However, results remained “very subdued” as consumers’ perceptions oftheir personal financial situations fell four points from -20 per cent to -24 per cent between May and June this year.
ANZ’s chief economist Sharon Zollner said that despite headlines about recession in the past month, “confidence lifted markedly in June”.
“It’s not all rosy in consumer land,” Zollner said.
“The overall level of confidence remains very subdued. While job security is still excellent on the whole and wage growth historically strong, ongoing cost of living increases continue to bite.
“Lower inflation expectations signal that we’re likely to see consumer confidence continue to rise over coming months, barring any nasty surprises.”
Data showed Kiwis expect inflation to fall back from 4.8 per cent to 4.3 per cent between May and June which Zollner said “the Reserve Bank (RBNZ) will be pleased to see”.
ANZ chief economist Sharon Zollner says the Reserve Bank's end to interest rate rises has had a positive impact on consumer confidence this month. Photo / File
Zollner said a contributor to a lift in confidence could be the RBNZ’s call to end rate hikes in the May Monetary Policy Statement.
“Increasing expectations that house price falls are done and dusted could also be a factor, though that certainly isn’t good news for everyone. But quite possibly the biggest factor is a fall in inflation expectations.”
A net 11 per cent of those surveyed expected to be better off this time next year, up 6 per cent on last month, while 27 per cent thought it is a bad time to buy a major household item, a 7 per cent improvement on last month.
Data showed that perceptions for the economic outlook in 12 months’ time were up 9 points to -34 per cent. The 5-year-ahead measure jumped from ‑12 per cent to 1 per cent between May and June.
House price inflation expectations also jumped from 0.4 per cent to 1.6 per cent in June, where Auckland showed the strongest lift up 14.6 per cent on last month.
Zollner said consumer confidence has “overstated the decline in retail spending, and any bounce-back in headline consumer confidence may correspondingly overstate the likely rebound”.
“Those with mortgages are generally more pessimistic, with the notable exception of the question about their personal financial situation in a year’s time. This suggests that people are expecting lower interest rates within that time frame.
