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

 

Sky City : Auckland Convention Centre Cost Jumps By A Fifth

SkyCity Entertainment Group, the casino and hotel operator, is in talks with the government on how to fund the increased cost of as much as $130 million to build an international convention centre in downtown Auckland, with further gambling concessions ruled out. The Auckland-based company has increased its estimate to build the centre to between $470 million and $530 million as the construction boom across the country drives up building costs and design changes add to the bill.
More>>

ALSO:

RMTU: Mediation Between Lyttelton Port And Union Fails

The Rail and Maritime Union (RMTU) has opted to continue its overtime ban indefinitely after mediation with the Lyttelton Port of Christchurch (LPC) failed to progress collective bargaining. More>>

Earlier:

Science Policy: Callaghan, NSC Funding Knocked In Submissions

Callaghan Innovation, which was last year allocated a budget of $566 million over four years to dish out research and development grants, and the National Science Challenges attracted criticism in submissions on the government’s draft national statement of science investment, with science funding largely seen as too fragmented. More>>

ALSO:

Scoop Business: Spark, Voda And Telstra To Lay New Trans-Tasman Cable

Spark New Zealand and Vodafone, New Zealand’s two dominant telecommunications providers, in partnership with Australian provider Telstra, will spend US$70 million building a trans-Tasman submarine cable to bolster broadband traffic between the neighbouring countries and the rest of the world. More>>

ALSO:

More:

Statistics: Current Account Deficit Widens

New Zealand's annual current account deficit was $6.1 billion (2.6 percent of GDP) for the year ended September 2014. This compares with a deficit of $5.8 billion (2.5 percent of GDP) for the year ended June 2014. More>>

ALSO:

Still In The Red: NZ Govt Shunts Out Surplus To 2016

The New Zealand government has pushed out its targeted return to surplus for a year as falling dairy prices and a low inflation environment has kept a lid on its rising tax take, but is still dangling a possible tax cut in 2017, the next election year and promising to try and achieve the surplus pledge on which it campaigned for election in September. More>>

ALSO:

Job Insecurity: Time For Jobs That Count In The Meat Industry

“Meat Workers face it all”, says Graham Cooke, Meat Workers Union National Secretary. “Seasonal work, dangerous jobs, casual and zero hours contracts, and increasing pressure on workers to join non-union individual agreements. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

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