Kiwis less bullish on buying major household items as confidence remains high

Monday 16th September 2013

New Zealand consumers are less keen on buying major household items though broadly confidence remains strong, based on the Westpac McDermott Miller Consumer Confidence Index.

The index fell to 115.4 in September from the three-year high of 116.6 reached in the June survey. The latest reading is still the second-highest since June 2010.

The 'good time to buy' indicator, which asks whether households deem it a good time to buy a major household items, fell to 24.7 percent from 34.4 percent, which Westpac chief executive Dominick Stephens put down to the impact of a weaker kiwi dollar pushing up the price of petrol and imported goods, as well as rising home-loan rates.

The present conditions index fell 4.2 points to 107.6 and the expected conditions index rose 0.7 points to 120.5.

The quarterly survey tallies with the ANZ-Roy Morgan consumer confidence index for September, released last week, which dipped to a still-buoyant 119 from 123 in August, suggesting that the economy is still on its track of moderate growth based on sentiment.

Gross domestic product for the second quarter is due on Thursday and is expected to show the economy, slowed to a 0.1 percent pace, after growing 0.3 percent in the first quarter, though this largely reflects the impact of drought, which reduced farm output and crimped output of products based on farm commodities.

The quarterly consumer confidence survey shows kiwi households are less gloomy about their current financial situation, with the net percentage saying their situation had improved at minus 9.4 percent from minus 10.8 percent three months earlier.

Those saying they expect the financial situation to improve slipped 0.5 points to 9.6 percent. Looking at the economy as a whole, a net 14.1 percent expect it to improve in the next 12 months, up 0.2 points from the previous survey, while the five-year outlook improved 2.5 points to 37.8 percent.

BusinessDesk.co.nz

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