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

 


NZ consumer confidence falls as interest rate hikes bite

NZ consumer confidence falls as interest rate hikes bite

By Suze Metherell

May. 23 (BusinessDesk) - New Zealand consumer confidence fell to a seven-month low in May as two interest rate hikes and expectations for slower economic growth later this year sapped people's optimism.

The ANZ-Roy Morgan consumer confidence index eased to 127.6 this month, from 133.5 in April, and is 8 points off the pre-recession high. The current conditions index slipped to 123 from 130.3 and the future conditions index fell to 130.7 from 135.8.

"Higher interest rates are starting to bite," said ANZ Bank New Zealand chief economist Cameron Bargie."The latest dent in confidence has translated into a slowing in expected economic growth over the second half of 2014.

"This is hardly ringing alarm bells - it's akin to moving from a gallop to a fast canter."

Government data last week showed retail sales grew at a slower-than-expected pace in the first quarter of this year in the lead-up to Reserve Bank kicking off a cycle of interest rate hikes in March and as the housing market slowed in response to restrictions on bank lending with small deposits. The Reserve Bank has signalled more interest rate hikes are to come and expects they will have a quicker impact with more borrowers on floating rates or fixed rates of one year or less.

The May survey of 1,047 people showed a net 10 percent of respondents were better off than a year ago, down from 13 percent in last month's survey. Looking out a year, a net 36 percent felt they would be better off, down from 40 percent the previous month. Perceptions of the broader economy fell for the fifth consecutive month, with a net 27 percent seeing better economic conditions ahead in the next 12 months down from 33 percent in April.

The biggest drop off in confidence was in those deeming it a good time to make a major household purchase, falling to a net 36 percent from last month's 47 percent.

Those thinking house prices would rise in the next two years remained static at 72 percent, predicting annual increases of 3.8 percent to 3.9 percent. Some 71 percent of respondents expect prices in general rise over the next two years at an annual pace of 3.1 percent, slower than the 3.2 percent pace seen in April.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

What Winter? Temperature Records Set For June 20-22

The days around the winter soltice produced a number of notably warm tempertaures. More>>

Conservation Deal: New Kākāpō Recovery Partnership Welcomed

Conservation Minister Maggie Barry says the new kakapo recovery partnership between DOC and Meridian Energy is great news for efforts to save one of New Zealand’s most beloved birds. More>>

ALSO:

Tech Sector Report: Joyce Warns Asian Tech Investors View NZ As Hobbits And Food

Speaking in Wellington at the launch of a report showcasing the value of the technology sector to the New Zealand economy, Joyce said more had to be done to tell the country's technology stories overseas. More>>

ALSO:

Mediaglommeration: APN Gets OIO Approval For Demerger Plan

APN News & Media has received Overseas Investment Office approval for its plan to split out its NZME unit ahead of a potential merger with rival Fairfax Media's New Zealand operations. More>>

New Paper: Ninety-Day Trial Period Has No Impact On Firms' Hiring

The introduction of a 90-day trial period has had no impact on hiring by New Zealand companies although they are now in widespread use, according to researchers at Motu Economic and Public Policy Research. More>>

ALSO:

Corrections: Serco Exits Equity Stake, Remains As Operator

Serco has sold its equity stake in the company that holds the contract to design, build and run Wiri Prison in South Auckland but continues as sub-contractor to operate the facility. More>>

GDP: NZ Economy Grows Faster-Than-Forecast 0.7%

New Zealand's economy grew at a faster pace than expected in the first quarter of 2016 as construction expanded at the quickest rate in two years. The kiwi dollar jumped after the data was released. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news