Consumers remain wary of purchasing major household items. Photo / 123RF
Consumer confidence lifted slightly in January but remains very subdued, according to the latest ANZ-Roy Morgan Consumer Confidence Index.
“Consumers continue to report ongoing extreme wariness about purchasing major household items,” said ANZ chief economist Sharon Zollner.
Topline consumer confidence rose one point to 93.6.
But the future conditions index, which is made up of forward-looking questions, fell three points to 99.
The current conditions index rose five points to 85.
“The wide gap between the current and forward-looking questions in the survey is starting to close. It’s early days, but such a pattern is typical as an economy recovers after a recession,” Zollner said.
The ANZ-Roy Morgan Consumer Confidence Index canvasses the opinions of just over 1000 people.
Perceptions of current personal financial situations rose another four points to -12 per cent – the highest level since January 2022 – but remains low.
Perceptions regarding the economic outlook in 12 months’ time eased one point to -22 per cent. The five-year-ahead measure fell one point to +1 per cent.
A net 19 per cent expect to be better off this time next year, down six points.
A net 19 per cent think it’s a bad time to buy a major household item, up six points to the highest level since August 2022.
“The lift may well reflect declining perceptions of inflation more than anything else. That’s welcome, but it does limit the good news for retailers compared to, say, an increase driven by a strengthening labour market,” Zollner said.
Inflation expectations bounced from 3.9 per cent to 4.3 per cent but are still trending downward quite sharply, the report said.
Zollner cautioned while the odds of another official cash rate (OCR) hike had receded, they were not zero.
“The odds are not zero or even close to zero, given the amount of inflation still in the system,” she said.
“As things stand it’s not a great baseline, as it leaves the inflation fight at the mercy of factors beyond the RBNZ’s control, like oil prices and shipping costs.
“Domestic inflation needs to come down further to bring overall inflation sustainably lower, but we’re getting there.
“And the negative impact of high inflation on households – which has been writ large in this survey over recent years – suggests it’s a battle worth fighting.”
Cameron Smith is an Auckland-based journalist with the Herald business team. He joined the Herald in 2015 and has covered business and sports.
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