NZ consumer confidence climbs to five-month high on sunny outlook
By Paul McBeth
June 20 (BusinessDesk) – New Zealand consumer confidence rose to a five-month high on a strong labour market and the government's boost to household incomes, announced in last month's Budget.
The ANZ-Roy Morgan consumer confidence index rose to 127.8 in June from 123.9 a month earlier, the highest reading since January. Of that, the current conditions index edged up 0.6 of a point to 129.4 while the future conditions measure climbed 5.5 points to 126.7.
"While housing market momentum is slowing, there is still plenty for consumers to smile about: jobs, a high New Zealand dollar that's keeping prices down, and the government's $2 billion family package injection to name just a few," ANZ Bank New Zealand chief economist Cameron Bagrie said in a note. "Our confidence composite gauge (which combines business and consumer sentiment, and so covers both the production and spending sides of the economy) continues to flag roaring economic momentum."
The survey follows a similar reading yesterday by a rival measure, the Westpac McDermott Miller consumer confidence index, which showed growing optimism for the June quarter. Again, respondents were more upbeat about the future while being more reticent about their present situation.
Today's ANZ index shows a net 33 percent of the 1,001 respondents surveyed expect to be better off in 12 months' time, compared to 32 percent in May, whereas a net 14 percent said they were better off now than a year earlier, down from 16 percent a month ago.
A net 25 percent anticipate better times ahead for the economy over the next 12 months, up from 17 percent in May, and a net 23 percent are optimistic on a five-year horizon compared to 15 percent a month earlier.
Of those surveyed, a net 45 percent say now is a good time to buy high-value consumer goods, up from 39 percent in May and the highest reading since January.
Bagrie said it was tempting to put the upbeat outlook down to the visiting British and Irish Lions rugby tour, but the robust labour market will ultimately lead to higher wages, the government's tax and household support adjustments would provide an injection into consumer spending.
The survey showed inflation expectations for the next two years eased to an annual pace of 3.5 percent from 3.6 percent in May, while house price inflation was seen slowing to an annual pace of 4 percent over the coming two years from a projected 4.6 percent a month earlier.