Research shows concerns about NZ economy

Around a third of all New Zealanders thought the economy had improved over the last six months, but the outlook is not so positive, with 35 per cent saying they felt the economy would deteriorate in the coming year, compared to 28 per cent of respondents across Asia Pacific.

These are the results of a global study released today by research company ACNielsen.

Their Online Consumer Confidence Survey, the largest twice-yearly global survey of its kind, is aimed to gauge consumers' current confidence levels, spending habits/intentions and current major concerns.

The survey, which took place in May 2005, polled over 21,100 respondents in 38 markets from Europe, Asia Pacific, North America, Latin America and Emerging Markets.

"New Zealand's economy has been buoyant for many years now", says Alistair Watts, Managing Director, ACNielsen Pacific. "However, consumer sentiment seems to have turned and New Zealanders are expecting the economy will deteriorate, perhaps as a result of falling real estate prices, rising oil prices and the looming election".

Along with Indians, Kiwis were the most positive in the region about both their job prospects and their personal finances - 85 per cent said job prospects in the next 12 months would be good or excellent; and 73 per cent said the state of their own personal finances would be good or excellent, and believed that now was a good time to buy things they want or need.

Based on the three dimensions of 'Job Prospects', 'Personal Finances' and 'Spending Desires', ACNielsen has established a Global Consumer Confidence Index designed to compare confidence levels across all markets in the survey.

Driven by the high levels for each element included in the global index, New Zealand indexed second behind India with a score of 119 (India scored 199), followed by Ireland with 113. The global average score was 92.

Any spare cash that New Zealanders had after basic living expenses have been covered was put towards paying off debts and putting into savings. Asked to indicate how they spent any spare cash after essential living expenses had been covered, the majority of consumers (43 per cent) said they used any spare cash to pay off debts, credit cards and loans.

The second most common use of spare cash was savings, with 33 per cent saying they put spare cash into savings accounts, a low figure compared to the regional average of 51 per cent.

This was followed by out of home entertainment (25 per cent), home improvements/decorating, holidays/vacations (both 22 per cent), new technology (18 per cent), and new clothes (17 per cent). Any plans to invest in shares were minimal with only 3 per cent of New Zealanders indicating they would use their spare cash to invest in shares.

Consumers were asked what their biggest concerns were over the next six months. Globally, consumers' ranked their major concerns as the Economy (45 per cent), Health (37 per cent) and Job Security (36 per cent).

"We saw a double-digit increase in New Zealander's concern about their health. This was the biggest concern for 22 per cent of New Zealanders, second globally only to China (with 55 per cent) in this round of the survey", said Mr Watts.

"With ageing populations and a trend for governments to cut back on healthcare, the public are becoming very anxious about their health in many countries," said Mr Watts. "Pressure is on governments to increase and upgrade public healthcare and facilities, and healthcare will become an even bigger and more serious concern for consumers in the future."

"And although New Zealanders believe job prospects are strong over the next 12 months, job security was placed second on the list with 17 per cent stating it as their biggest concern", Mr Watts continued.

"The concern about the future New Zealand economy was also made evident, with 13 per cent of New Zealanders stating it as their biggest concern.