NZ consumer confidence rises in January as housing market stabilises, election jitters fade

Friday 2nd February 2018

New Zealand consumer confidence rose in January, snapping a three-month slide, as Kiwis became more upbeat about the economic outlook, house prices and spending on major household items.

The ANZ Roy Morgan consumer confidence index rose to 126.9 in January from 121.8 in December. The current conditions index rose 8.1 points to 131.3, the highest level since 2007, while the future conditions index gained 3 points to 124.

Of the 999 respondents to the survey, a net 21 percent saw good economic times in the coming 12 months, up from 13 percent in December. The five-year outlook was unchanged from the previous month, with a net 22 percent seeing good times ahead. Respondents felt they and their families were better off financially than this time last year (rising to 16 percent from 14 percent). A net 29 percent expect to be better off financially a year from now, up from 28 percent in the December survey.

"Consumer confidence has bounced back as the housing market has stabilised and the uncertainty around the election has receded," said Sharon Zollner, chief economist at ANZ Bank New Zealand. "The labour market is strong and the outlook for household incomes is solid, so it is hard to argue the optimism is unwarranted."

New Zealanders have become more optimistic about spending - with a net 47 percent saying it was a good time to buy a major household item, up 15 points from December. They're also more upbeat about housing - national house price expectations rose to 2.9 percent from 2.4 percent. But asked where prices, in general, would be in two years, the survey showed a net 3.2 percent increase expected, down from a 3.5 percent increase seen in the previous month's survey.

Zollner said there was still "a hint of wariness in the responses to the forward-looking questions".

"This is consistent with our belief that the economy is experiencing a bit of a lull as a number of growth drivers run out of puff around the same time (migration, housing, and construction in particular)," she said in the statement.

(BusinessDesk)

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