Consumer confidence was steady in March. The ANZ-Roy Morgan Consumer Confidence Index rose 1 point to 122, around its historical average. Moves were pretty much rounding errors: the Current Conditions Index fell 1 point to 125, while the Future Conditions Index lifted 2 points to 120.
Overall, consumer confidence remains buoyed around its historical average despite mounting global and domestic risks. Confidence has picked up from 2018 lows, but caution regarding the overall economic outlook appears to be preventing a break above average levels. However, a high proportion of people thinking it’s a good time to buy a major household item suggest robust household spending despite weakness in Auckland house prices and slower housing market activity.
Our confidence composite gauge combines business expectations and intentions with overall consumer sentiment to capture both the demand and supply side of the economy and give a better indicator for growth than either series alone. It continues to suggest that momentum in the economy has slowed considerably (figure 2), but the composite has stabilised at a low level. We see economic growth averaging around 2½% over the next couple of years, with slower population growth and weaker housing wealth effects weighing on consumption growth.
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