Rise in consumer confidence positive - yet not setting any trends
New Zealand consumers have brought the New Year to a positive start, but the increase in consumer confidence still does not seem to be bucking any specific trends according to recent ANZ New Zealand data.
Consumer confidence rose to 116.1 in January this year from last year’s December result of 108.4 according to the ANZ-Roy Morgan Consumer Confidence index, though seasonal adjustments are responsible for the rise.
The current conditions index rose 11.3 points to 113.8 as the index for future conditions gained just 5.3 points to 117.6, making it the narrowest gap between expectations and reality since the beginning of 2009.
ANZ chief economist Cameron Bargie said that consumers are keeping their distance towards following consumer trends and that the positive outlook for the start of this year may only be temporary.
“Consumers appear to be taking a wait and see stance. We see little in this month’s survey that flags a pending change in listless and fickle consumer spending behaviour.”
Ever since the nation fought its way out of its deepest recession in a decade for 2010, households have been clamping down on spending, with the flat-line in demand putting pressure on retailers to heavily discount stock to attract spending.
An example of this can be seen in the latest trend in ‘smart-device’ spending, as recent discounted prices on the handheld Smartphone devices have resulted in demand surging upwards.
Of the 2,042 people surveyed, a net 6% think they are worse off than the previous year, down from a net 10% last month, while a net 32% expect to be better off next year in 2013, up from a net 23% in December.
A net 2% of respondents believe New Zealand’s economy will experience more negative times in the coming twelve months, down from a net 6% in the previous survey, while a net 23% predict more good times over the coming five years, which is up from a net 20% in December last year.
A net of 34% of people think it’s a good time to purchase big-ticket item, which rose from a net 15% last month.
ANZ’s Bargie said there was a sharp jump in consumer’s expectations for the average rate of inflation over the next two years to 4.4% from a previous 3.5% in the last survey.
“This is the strongest reading since we started sampling three years ago.”