New Zealand consumer confidence sank to an 18-month low in the December quarter suggesting retailers have little reason to expect Christmas cheer to be reflected in sales.
The Westpac McDermott Miller Consumer Confidence Index fell 5.8 points to 108.3, based on the survey conducted between December 1 and December 14.A number above 100 shows optimists outnumber pessimists.
For a second year, the December quarter survey quizzed kiwis on the Christmas gift spending intentions, and the results showed the median consumer plans to spend a net 36 per cent less on presents than they did last year, at a total of $413.
Figures this week showed core retail sales fell 1.6 per cent in October and the NZSE Consumer Index, which tracks companies such as retailers, has fallen 5.2 per cent in the past month.
"The fall in confidence is widespread," said Westpac economist Donna Purdue. "That means consumer spending is likely to remain fairly modest over the Christmas period."
A net 16.6 per cent of respondents to the survey deemed now a good time to buy a major household item, down from 23.9 per cent three months ago and the lowest level since June 2009.
Those expecting worsening economic conditions over the next 12months rose to a net 9.7 per cent of respondents from a net 3 per cent in the September survey. Looking out five years, a net 48 per cent expect better economic times, down from a net 54.5 per cent three months ago.
Kiwis are gloomier about their own financial circumstances. A net 22 per cent said they were worse off than a year ago, a deterioration from the net 17 per cent who said they were worse off in the September quarter. Looking out 12 months, 8.5 per cent of respondents saw their own financial situation improving, easing back from 12.8 per cent in September.
