Despite slowing economic growth forecasts and gloomy business confidence, consumers remain relativity upbeat, according to the latest ANZ Roy Morgan survey.
The ANZ-Roy Morgan Consumer Confidence Index rose 2 points to 118 in
August, slightly below the historical average but unwinding some of last months' 6-point fall.
"Households are feeling relatively robust at the moment," said ANZ chief economist Sharon Zollner.
That was good news for retailers, she said.
Consumers' perceptions of their current financial situation rose 4 points to
a net 16 per cent feeling financially better off than a year ago.
A net 27 per cent of consumers expect to be better off financially this time next
year, a solid 6 point bounce-back versus last month.
A net 39 per cent think it's a good time to buy a major household item,
Perceptions regarding the next year's economic outlook were unchanged at
a net 1 per cent expecting conditions to worsen.
"Low interest rates are set to provide another support, Zollner said.
But a key downside risk over the year ahead was that employment indicators had deteriorated - based on employment intentions out of key business surveys (ANZBO, QSBO, PMI) and job ads.
"While the labour market is undeniably tight at the moment, that appears set to change," Zollner said.
"For now, however, the proportion of people who think it's a good time to buy a
major household item remains high, which is good news for retailers."
The lift in the index was led by improvements in confidence in Auckland and Canterbury.
The only region where confidence fell was the North Island excluding Auckland and Wellington.
House price inflation expectations remain weakest in Canterbury (1.5 per cent)
and are strongest in the rest of the South Island (3.8 per cent).
"We expect that the 50bp OCR cut delivered in August will filter through to
consumers in time which should lift confidence, as long as the labour market
holds up," Zollner said.