NZ consumer confidence slips in May

NZ consumer confidence slips in May

By Tina Morrison

May 22 (BusinessDesk) - New Zealand consumer confidence slipped in May as sentiment about current and future conditions eased.

The ANZ-Roy Morgan consumer confidence index fell to 123.9 in May from 128.8 in April. The current conditions index dropped to 124.6 from 130.3 last month, while the future conditions index declined to 123.4 from 127.8.

"Consumer confidence is down, but the level remains very respectable and healthy," said ANZ Bank New Zealand chief economist Cameron Bagrie. "We continue to pencil in 3 percent real GDP (gross domestic product) growth over the year ahead, featuring modest employment growth and the same for consumption and retailing."

The confidence survey of 990 people found a net 7 percent felt they were better off financially than this time last year, down from 12 percent in April. A net 25 percent expected to be better off financially this time next year, down from 31 percent in April.

Meanwhile, a net 21 percent expected New Zealand's economy would have good financial times in the next 12 months, down from 27 percent last month. The country was expected to have continuous good times ahead over the next five years, according to a net 25 percent of people surveyed, unchanged from last month.

A net 42 percent of people considered it a good time to buy a major household item, down from 49 percent last month.

Respondents said they expect consumer prices to increase to an annual pace of 3.6 percent over the next two years, rebounding from 2.8 percent in April which marked the lowest reading in the survey's history.

They predict an annual 5.5 percent rise in house prices over the same period, up from 5 percent last month. While expectations for Auckland house price gains were a "frothy" 6.7 percent, Wellington showed the largest jump, up to 6.9 percent from 4.4 percent.

ANZ said next month's survey would likely show whether measures by the Reserve Bank and the government to cool the housing market had had an impact.

(BusinessDesk)

© Scoop Media