Cameron Bagrie says there's a degree of caution in the air.
Cameron Bagrie says there's a degree of caution in the air.
New Zealand consumer confidence remained upbeat in July as Kiwis were more optimistic about their own fortunes than they were for the broader economy.
The ANZ-Roy Morgan consumer confidence index slipped to 118.2 last month from 118.9 in June, though a net 29 per cent of respondents expect to bebetter off financially in a year's time, compared with 24 per cent a month earlier. They were less optimistic about their 12-month outlook for the economy, with a net 4 per cent expecting good times ahead, down from 9 per cent in June, while over a five-year horizon a net 13 per cent see more good times, compared to 16 per cent.
The current conditions index slipped 0.2 of a point to 122.5 while the future conditions index decreased 0.9 of a point to 115.5.
"The mix to growth [more borrow and spend] is becoming increasingly lopsided but we'll take it for now," ANZ Bank New Zealand chief economist Cameron Bagrie said "While we are seeing clear exuberance on some levels [housing, credit growth], reasonable [as opposed to exuberant] levels of consumer sentiment suggest a degree of caution nonetheless in terms of blowing all the loot."
Government figures this week showed retail spending on credit and debit cards rose 1.2 per cent in June. Consumer spending has been underpinned by record net migration inflows and high numbers of tourists coming to New Zealand, which has helped make up for anemic economic growth on a per capita basis. The survey of 1000 people showed a net 36 percent of respondents think it's a good time to buy a major household item, unchanged from a month earlier, while inflation expectations eased to 3.3 per cent annual pace from 3.8 per cent in June.
Consumer price figures are out next week and will likely show inflation rose 0.5 per cent in the June quarter. Inflation has been tracking below the Reserve Bank's target band of 1 per cent to 3 per cent since late 2014, though skills shortages are emerging in the building sector.
