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

 


NZ consumer confidence slips in 2Q on weak dairy, rate hikes

NZ consumer confidence slips in 2Q on lower dairy prices, higher interest rates

By Tina Morrison

June 16 (BusinessDesk) - New Zealand consumer confidence fell in the second quarter as lower dairy prices and higher interest rates weighed on sentiment.

The Westpac McDermott Miller Consumer Confidence Index slid to 121.2 in the June quarter, from a nine-year high of 121.7 in the March survey. A reading above 100 indicates more optimists than pessimists.

The drop in confidence was most noticeable in smaller urban centres and rural areas, which would have been most affected by a drop in global dairy prices. A net 31 percent of those polled expect good times ahead for the economy over the year ahead, down from a net 35 percent in the March quarter and the first decline since the September 2013 quarter. Optimism about the next five years slipped below the historical average to a net 30.1 percent from 31.8 percent in the March quarter.

"Consumer confidence remains extremely high," Westpac Banking Corp senior economist Felix Delbruck said in a note. "Given the recent drop in dairy prices and the fact that the Reserve Bank has started raising interest rates, it's perhaps surprising that confidence hasn't fallen more."

The survey was taken June 1-10, before the Reserve Bank raised the benchmark interest rate by 25 basis points to 3.25 percent on June 12, the third increase this year. There was little sign in the survey that rising interest rates were prompting a greater desire to save or pay down debt, with the number of people saying they would invest a windfall in savings or use it for debt repayment at a 15-year low.

The net balance of households saying it is a good time to buy a major household item rose for a third consecutive quarter to 31.5 percent from 28.3 percent and when asked what they would do with a cash windfall, more people said they would use it to go on a holiday, suggesting bargain-hunting by consumers lured by the continued drawcard of cheap imported goods and overseas trips.

"Today's survey gives little sense that rising interest rates have dampened spending appetites," Delbruck said. "Consumers' attitudes towards their own finances are little changed since early March and they seem to have become less focused on saving and paying down debt.

"This may reflect the fact that borrowers have recently had the opportunity to fix their mortgages at favourable rates," he said. "The Reserve Bank will be taking note and feeling validated in its decision to signal more rate hikes to come."

New Zealand's central bank is expected to deliver another two rate rises this year, according to a Reuters poll of economists taken after last week's rate increase. Nine of 13 economists expect the next rise to come in July.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Air NZ Wine Awards: Victory For Villa Maria As Pinot Noir Thrills

It was a night to remember as Villa Maria Estate picked up one of the highest accolades of the evening, the O-I New Zealand Reserve Wine of the Show Trophy, at the 28th Air New Zealand Wine Awards. The Villa Maria Single Vineyard Southern Clays Marlborough ... More>>

ALSO:

Future Brighter Money: RBNZ Releases New Bank Note Designs

New Zealand’s banknotes are getting brighter and better, with the Reserve Bank today unveiling more vibrant and secure banknote designs which will progressively enter circulation later next year. More>>

ALSO:

Commerce: Supermarket Inquiry Finds No Breaches By Countdown

The Commerce Commission inquiry into anti-competitive behaviour by Countdown supermarkets, alleged by former Labour Party MP Shane Jones, has found nothing to warrant prosecution, although it warns supermarkets to take care in the way they communicate... More>>

ALSO:

Crown Accounts: English Flags ‘Challenge’ To Budget Surplus

Finance Minister Bill English is warning next month’s half yearly fiscal and economic update from the Treasury may not forecast a budget surplus, saying that returning the government’s accounts to surplus in 2015 will be “a challenge”, given the decline in commodity prices and weak global inflation. More>>

ALSO:

March 2015: Netflix To Launch In Australia And New Zealand

World’s Leading Internet Television Network to Offer Original Series, Movies, Documentaries, Stand-Up Comedy Specials and TV Shows for Low Monthly Price More>>

ALSO:

Price Of Cheese (Is Up): Dairy Product Prices Fall To Five-Year Low

Dairy product prices fell in the latest GlobalDairyTrade auction to the lowest level in more than five years, led by declines in rennet casein and skim milk powder. More>>

ALSO:

Gordon Campbell: On The Australians Scoring Trade Points Against Us With The Chinese

It hasn’t been a great year for Trade Minister Tim Groser... To top it off, Australia has just signed a FTA with China that has far better provisions on dairy exports than what New Zealand currently enjoys in our own FTA with China. More>>

ALSO:

Iwi & Local Consultation: Oil And Gas Block Offer 2015 Begins

Energy and Resources Minister Simon Bridges today announced the start of the Block Offer 2015 process for awarding oil and gas exploration permits. More>>

Get More From Scoop

 
 
Standards New Zealand

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