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

 


RESEND: NZ consumer confidence falls

RESEND: NZ consumer confidence falls as interest rate hikes bite

(Fixes typo in third paragraph)

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 Bagrie."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 the 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 to 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

 

Fonterra: Canpac Site 'Resize' To Focus More On Paediatrics

Fonterra is looking at realigning its packing operations at Canpac, in the Waikato, to focus more on paediatric nutritionals... The proposed changes could mean around 110 roles may not be required at the site which currently employs 330. More>>

Warming: Warming Signs From State Of Climate Report

Climate data from air, land, sea and ice in 2013 'reflect trends of a warming planet' -- says the latest State of the Climate report, launched by U.S. and New Zealand scientists. More>>

ALSO:

Scoop Business: Embrace Falling Home Affordability, Says NZIER

Despair over the inability to afford a house is misplaced and should be embraced as an opportunity to invest in more wealth-creating activity, says the principal economist at the New Zealand Institute of Economic Research, Shamubeel Eaqub. More>>

Productivity Commission: NZ Regulation Not Keeping Pace

New Zealand regulators often have to work with out-of-date legislation, quality checks are under strain, and regulatory workers need better training and development. More>>

ALSO:

Callaghan Innovation: Investment To Help Deepen Innovation Reporting

Callaghan Innovation, the government’s high tech HQ for Kiwi business, is to help deepen New Zealand media coverage of the commercialisation of innovation through an arms-length partnership with independent business news service BusinessDesk. More>>

ALSO:

Tax Credits, Grants: Greens $1Bn R&D Plan

In the Party’s headline economic announcement, the Greens have launched their plan to build a smarter, more innovative economy which has as its centrepiece an additional $1 billion of government investment in research and development (R&D) above current spend, including tax breaks for business. More>>

ALSO:

Inflation: CPI Increases 0.3 Percent In June Quarter

The consumers price index (CPI) rose 0.3 percent in the June 2014 quarter, Statistics New Zealand said today. This follows rises of 0.3 percent the March quarter and 0.1 percent in the December 2013 quarter. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

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