Consumer confidence dims over scary looking future
BUSINESSDESK: New Zealand consumer confidence dimmed in the second quarter of the year as people were content about the present, but increasingly gloomy about the future.
The Westpac McDermott Miller Consumer Confidence Survey fell 2.5 points to 99.9 in the three months ending June, eroding gains in the first three months of the year, and indicating there are more pessimists than optimists.
Respondents were more upbeat about their current situation, with the present conditions index up 3 points to 101.5, though the expected conditions index sank 6.2 points to 98.7, its lowest level since mid-2008.
"The fall in confidence reflects greater anxiety about the year ahead, outweighing an improved perception of present conditions," Westpac economist Felix Delbruck said in his report.
"Today's survey reflects that balance between a more spender-friendly present and a scarier future."
The survey comes ahead of the official first-quarter gross domestic product figures on Thursday, which are expected to show the economy grew 0.5 percent in the first three months of the year.
Statistics New Zealand revised its quarterly retail sales data to a smaller decline of 0.6%, prompting some economists to rejig their forecasts.
A net 17% of the 1570 respondents said they feel financially worse off than a year ago, down from 20% in the March quarter, though a net 20% said it is a good time to buy a major household item, up from a net 17% in the first quarter.
A net 29% of respondents expect mainly bad times ahead, and a net 1% expect their own situation to deteriorate, the first time household expectations have been pessimistic since June 2008.
Westpac chief economist Dominick Stephens said people's current feelings are a "better guide to how much they will actually spend" and that the survey is a "reasonably positive signal for retail spending".
Last week, government figures showed New Zealanders spent more on their credit and debit cards in May as their fuel bills got bigger.