Consumer confidence still negative despite lift, Roy Morgan index shows

Consumer confidence has risen to its highest level since June, with more households optimistic about the future. Photos / Alex Burton

By RNZ

Consumer confidence has lifted to its highest level since June, with more households expecting to be better off in a year.

The ANZ Roy Morgan Consumer Confidence Index lifted six points in November to just over 98.

However, a score below 100 indicates more pessimists than optimists.

“It’s good to see a decent lift in consumer confidence this month, though it is yet to break out of recent ranges,” ANZ chief economist Sharon Zollner said.

“Although it’s early days in terms of the economic recovery, this is not the only indicator suggesting that things are looking up for consumers,” she said.

A net 21% of respondents expected to be better off this time next year, the highest level since April.

“Consumer arrears have been declining, employment has returned to modest growth, and retailers are reporting improved activity,” Zollner said.

ANZ said a net 9% thought it was a bad time to buy a major household item, suggesting ongoing caution.

Zollner said the “good time to buy” indicator has not been positive in more than four years.

“Consumers’ reluctance to spend in recent years has certainly been felt by the retail sector.”

Zollner noted falling consumer arrears, employment returning to modest growth and retailers reporting improved activity.

“Our card spending data shows a return to growth across a broad range of discretionary categories, though overall spending levels are still very subdued compared to the Covid-era boom.”

Zollner said aside from lower inflation, the slowdown also led to household debt relative to incomes back to where it was before the housing bubble.

“Now we’ve taken our medicine, the stars are aligning for better times ahead.”

– RNZ