Consumers are feeling average according to the ANZ-Roy Morgan Consumer Confidence Index, which slipped 1 point to 120 in June – its lowest level since August 2016. On a seasonally adjusted basis the index fell 2 points, also at 120.
The Current Conditions Index rose 1 point to 125.7 in June, exactly in line with its 12-month average and well above its historical average of 116.7. The Future Conditions Index fell 2 points to 116.2; well below its average (121.7).
- Consumers’ perceptions of their current financial situation lost 2 points, with a net 11% feeling financially better off than a year ago.
- A net 26% of consumers expect to be better off financially this time next year, down 1 point.
- A net 40% say it’s a good time to buy a major household item, up 4 points from May.
- Perceptions regarding the next year’s economic outlook eased a further 5 points to +7%, the lowest reading since August 2016. The five-year outlook also dipped, down 1 point to +16%.
- Confidence fell a further 2 points in Auckland, which remains the least confident region. The rest of the North Island is also relatively subdued. Regional South Island and Wellington confidence both slipped 3 points.
- Expectations for national house price inflation dipped from 3.7% y/y to 3.6%, with Wellingtonian expectations no longer leading the pack, down 1%pt to 3.2%. General inflation expectations were unchanged at 3.9%.
ANZ-Roy Morgan New Zealand Consumer Confidence has weakened to average levels over Q2. While perceptions of current conditions remain strong, there is a degree of wariness about the future. The cocktail of moderating economic growth and heightened downside risks to the outlook may be proving a little too bitter for some, particularly given the backdrop of high household debt and elevated housing costs. Nonetheless, labour market conditions are supportive, with a lift in wage growth looking likely, while the housing market remains stable.
In our view, consumer confidence around average isn’t necessarily a bad thing; particularly given we’re late in the cycle. A strong rise in household debt wouldn’t be optimal from a financial stability standpoint, and a modestly higher saving rate wouldn’t go amiss in terms of building household’s resilience for the inevitable rainy day. That said, a sharp drop in consumer confidence from here wouldn’t bode well for the overall activity outlook.
Click here to download the latest ANZ-Roy Morgan New Zealand Consumer Confidence Release PDF - June 2018.
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The latest Roy Morgan Consumer Confidence Monthly Report is available on the Roy Morgan Online Store. It provides demographic breakdowns for Age, Sex, State, Region (Capital Cities/ Country), Generations, Lifecycle, Socio-Economic Scale, Work Status, Occupation, Home Ownership, Voting Intention, Roy Morgan Value Segments and more.
You can also view our monitor of Quarterly New Zealand Unemployment & Under-employment Estimates.
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