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

 

Housing: Affordability Drops 14%, Driven By Auckland Prices

Housing affordability across New Zealand fell 14 percent in the year ending November 2014, with Auckland’s lack of affordability set to reach levels it hit during the height of the global financial crisis, according to the latest Massey University Home Affordability Report More>>

ALSO:

The Dry: Fonterra Drops Forecast Milk Volumes By 3.3 Percent

Fonterra Cooperative Group, the worlds largest dairy exporter, reduced its milk volume forecast for the 2014-2015 season by 3.3 per cent due to the impact of dry weather on production in recent weeks. More>>

ALSO:

Strike: Lyttelton Port Workers Vote To Escalate Dispute

Members of the Rail and Maritime Transport Union (RMTU) at Lyttelton Port today voted to escalate their industrial action. Around 200 RMTU members have been operating an overtime ban since 17 December and today they endorsed a series of full withdrawals of labour at the port. More>>

ALSO:

Scoop Business: NZ Dollar Falls To 3-Year Low As Investors Favour Greenback

The New Zealand dollar fell to its lowest in more than three years as investors sold euro and bought US dollars, weakening other currencies against the greenback. More>>

ALSO:

Scoop Business: NZ Govt Operating Deficit Smaller Than Expected

The New Zealand’s government’s operating deficit was smaller than expected in the first five months of the financial year as a clampdown on expenditure managed to offset a shortfall in the tax-take from last month’s forecast. More>>

ALSO:

0.8 Percent Annually:
NZ Inflation Falls Below RBNZ's Target

New Zealand's annual pace of inflation slowed to below the Reserve Bank's target band in the final three months of the year, giving governor Graeme Wheeler more room to keep the benchmark interest rate lower for longer.More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news