Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Kiwis to Take on More Credit as Confidence Grows

Kiwis to Take on More Credit as Confidence Grows

Kiwis are expecting to take on additional credit and increase spending in the early part of 2013, driven by an improved perception of their household finances and a greater ability to cover existing credit obligations. These findings provide further evidence of rising consumer confidence and a recovery in New Zealand’s economy.

These are some of the findings from Dun & Bradstreet’s (D&B) Consumer Credit Expectations Survey, which examines expectations for savings, credit usage, spending and debt performance in the March quarter 2013.

The survey reveals that four in 10 people plan to raise their credit limit over the next three months. This compares to one in four during the previous quarter and is up a substantial 35 per cent over the past six quarters.

A significant proportion of consumers also expect to spend more over the next quarter, with one in four planning to make a major purchase1. This compares to one in five during the December quarter last year and builds on data released by Statistics New Zealand2, which shows three consecutive monthly increases in credit and debit card spending.

The D&B survey also reveals that 48 per cent of New Zealanders are comfortable with their financial situation, up seven per cent from the December quarter 2012. This improved perception is in part a reflection of an increase in the number of people able to manage their existing credit obligations. Sixty two per cent of New Zealanders do not expect to face difficulties paying off their credit accounts during the March quarter, up seven per cent quarter-on-quarter, and up four per cent from the June quarter of 2012. Conversely, only five per cent of people expect to find it extremely difficult to meet their credit obligations, unchanged from the previous quarter but down by four per cent from the June quarter last year.

According to D&B New Zealand’s General Manager, Lance Crooks, the prudent management of finances which has occurred since the onset of the GFC has put many households in a better financial position.

“Improved expectations of meeting credit obligations, credit appetite and spending indicate resurgence in consumer confidence, which is significant when compared to the sluggish consumer behaviour during and after the GFC. It also points to a shift towards more prudent behaviour as New Zealanders become better at managing their personal finances,” said Mr Crooks.

“Consumers are finally beginning to show signs of spending and at the same time are experiencing more positive financial conditions. In light of the encouraging data we’re seeing in the domestic economy at the moment, this demonstrates that many consumers are finally feeling the trickle-down effects of improving economic conditions.”

The considered approach many consumers are taking is also reflected in the mixture of cash and credit they are using to fund their purchases – 68 per cent of people plan to pay for their purchases from their savings and more than one in five expect to use their credit cards.

“This data reveals that most consumers are spending within their means, with many continuing to rely on their savings as the primary method of paying for a big purchase,” said Mr Crooks.

In line with improved consumer sentiment, the Consumer Credit Expectations Survey also reveals 28 per cent of consumers expect to lower their debt levels in the coming months. This is up three per cent quarter-on-quarter and up five per cent over the past six months.

According to Dun & Bradstreet’s Economic Advisor, Stephen Koukoulas, “the slow but steady improvement in the New Zealand economy continues to be reflected in the behaviour of consumers, who are poised to increase their borrowing and spending. In terms of the economic growth outlook, this is good news.”

“While the Reserve Bank of New Zealand will welcome further evidence of an economic pick-up, it will view the likely rise in consumer borrowing with some caution. Over many years, low consumer savings and high consumer debt have been imbalances that have posed a risk to New Zealand’s long-run growth performance.”


Note:
This national survey was conducted online on behalf of D&B by TNS Global from 14-18 January, surveying 926 respondents aged 18-64 years.

1Major purchases refer to big-ticket items such as a car, home improvement, television or a holiday, among others.

2Electronic card transactions: December 2012, Statistics New Zealand, http://stats.govt.nz/browse_for_stats/businesses/business_characteristics/ElectronicCardTransactions_MRDec12.aspx

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Errors Found: Electricity Authority Dumps Transmission Pricing Modelling

The Electricity Authority is ditching the cost-benefit analysis at the heart of its controversial attempt to find a new way to divide up costs for the national grid after finding an expanding range of serious computational errors in the work by Australian consultancy Oakley Greenwood. More>>

ALSO:

New Record: Migrant Arrivals At 129,500 A Year

Annual net migration has been steadily increasing since 2012. "This was mainly due to the rising number of migrant arrivals to New Zealand," population statistics senior manager Peter Dolan said. "Fewer migrant departures also contributed to the increase in net migration." More>>

ALSO:

Launched: NASA's Super Pressure Balloon Takes Flight From NZ

NASA successfully launched its football-stadium-sized, heavy-lift super pressure balloon (SPB) from Wanaka, New Zealand, at10:50 a.m. Tuesday, April 25 (6:50 p.m. April 24 in U.S. Eastern Time), on a mission designed to run 100 or more days floating at 110,000 feet (33.5 km) about the globe in the southern hemisphere's mid-latitude band. More>>

ALSO:

Trade Agreements: TPP Minus US Starting To Gain Ground

The Japanese government is picking up the pace on reviving the Trans-Pacific Partnership trade and investment deal, with talks scheduled next month among the 11 countries left in the pact after the withdrawal by the US after the election of president Donald Trump. More>>

ALSO:

PACER:

Prices Up 2.2%: Annual Inflation Highest In Over Five Years

"Rising petrol prices along with the annual rise in cigarette and tobacco tax lifted inflation," prices senior manager Jason Attewell said. "Petrol prices in New Zealand are closely linked to global oil prices, and cigarettes and tobacco taxes rise in the March quarter each year". More>>

ALSO:

Undertaxed? NZ Income Tax Rate Second Lowest Among Developed Nations

New Zealand workers pay the second smallest portion of their income to the government among developed nations and less than half the average ratio of their Organisation for Economic Cooperation and Development peers. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news