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

 

Company Results: Air NZ Rides The Tourism Boom With Record Full-Year Earnings

Air New Zealand has ridden the tourism boom and staved off increased competition to deliver the best full-year earnings in its 76-year history. More>>

ALSO:

New PGP: Sheep Milk Industry Gets $12.6M Crown Funding

The Sheep - Horizon Three programme aims to develop "a market driven, end-to-end value chain generating annual revenues of between $200 million and $700 million by 2030," according to a joint statement. More>>

ALSO:

Half Full: Fonterra Raises Forecast Milk Price

Fonterra Co-operative Group Limited today increased its 2016/17 forecast Farmgate Milk Price by 50 cents to $4.75 per kgMS. When combined with the forecast earnings per share range for the 2017 financial year of 50 to 60 cents, the total payout available to farmers in the current season is forecast to be $5.25 to $5.35 before retentions. More>>

ALSO:

Keep Digging: Seabed Ironsands Miner TransTasman Tries Again

The first company to attempt to gain a resource consent to mine ironsands from the ocean floor in New Zealand's Exclusive Economic Zone has lodged a new application containing fresh scientific and other evidence it hopes will persuade regulators after their initial application was turned down in 2014. More>>

Wool Pulled: Duvets Sold As ‘Premium Alpaca’ Mostly Sheep’s Wool

Rotorua business Budge Collection Limited (Budge) and sole director, Sun Dong Kim, were convicted and fined a total of $71,250 in Auckland District Court after each pleading guilty to four charges of misrepresenting how much alpaca fibre was in their duvets. More>>

Reserve Bank: Labour Calls For Monetary Policy To Expand Goals

Labour's comments follow a speech today by RBNZ governor Graeme Wheeler in which Wheeler sought to answer critics who variously say he should stop lowering interest rates, lower them faster, or that inflation-targeting should no longer be the primary goal of the central bank's activities. More>>

ALSO:

BSA Extension And Sunday Morning Ads: Digital Convergence Bill Captures Online Content

Broadcasting Minister Amy Adams has today announced the Government’s plans to update the Broadcasting Act to better reflect today’s converged market... The Government considered four areas as part of its review into content regulation: classification requirements, advertising restrictions, election programming and contestable funding. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news