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Kiwis Buoyant About Economic and Employment Outlook

Kiwis Buoyant About Economic and Employment Outlook

Saving and reducing debt top of mind as New Zealand’s consumer confidence recovers

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AUCKLAND, New Zealand – February 11, 2014 – Close to 90% of Kiwis are planning to save more in the next six months, even as optimism in the New Zealand economy and personal employment prospects continue to grow. This is according to the latest MasterCard Consumer Confidence Index, which highlighted that on average, Kiwis are planning to save around 16% of their income in the next six months.

The research surveyed Kiwis’ six-month outlook across the economy, employment prospects, the local stock market, regular income prospects and their quality of life; revealing that even as confidence in the economy (59.4 points, up from 45.8 in the first half of 2013), employment (55.8, up from 36.9) and quality of life (41.4, up from 34.2) improve, the savings habits and lessons learnt during the global financial crisis remain embedded in our ethos.
Interestingly, New Zealanders are more positive in their overall outlook (55.0) than our Australian counterparts (49.2), with the exception being our perspective on our quality of life (41.4) – an aspect in which the Aussies remain slightly more optimistic (44.4). Compared to the rest of Asia-Pacific, New Zealand ranked 8th most optimistic out of 16 markets surveyed in terms of its overall outlook, whilst Australia ranked 11th.
“The boost in consumer confidence is in line with other market insights. The jump to 55 points (up from 49.9 points in the first half of 2013) puts New Zealand at its highest since early 2010,” said MasterCard New Zealand Country Manager Peter Chisnall.

“Kiwi consumers are taking note of the positive signs pointing to stronger economic recovery in 2014, and this optimism is being carried across to consumer behaviour and outlook, and driving better savings.

“While we’re spending more, we are still saving in big numbers. In times of a windfall, paying off debt (34%) and saving (29%) remain a top priority – which highlights that Kiwis have taken on-board the lessons from the global financial crisis.”

Although Kiwi’s savings habits continue to improve however, more than a quarter (28%) admitted that they wouldn’t have the funds to survive even a month on what they had saved if their income stream was to dry up. On average, Kiwis could survive for 4-months on savings alone, with 26% stating they could survive more than 6-months on savings.

“Most Kiwis continue to be savvy financial managers, and for this reason they realise the value in savings. However, after meeting their day-to-day expenses, many Kiwis still do not have the discretionary income available to save. As the Consumer Price Index continues to rise, the financial pressure on many households is increasing, making the need for careful financial decision-making more critical than ever.

“The positive news is that most Kiwis have a good understanding of basic money management (89%) and most do not have problems with budgeting (77%) or keeping up with bills (79%). A third confess to often having problems setting money aside for big purchases (32%), but overall, New Zealand has an extremely high level of financial literacy” said Mr Chisnall.

When it comes to what we are planning to do with our savings, New Zealanders are putting their pennies away for retirement (47%, up from 44% in the first half of 2013), travel (33%, up from 31%) and investments (31%, up from 28%), although buying or renovating the home was still also high on people’s intentions (29% down from 33%).

ENDS

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