Consumer confidence dips in March quarter
New Zealand consumer confidence dipped in the March quarter as people grew wary about the short-term economic outlook but extended the nation's run of optimism to six years.
The Westpac McDermott Miller consumer confidence index declined 1.2 points to 111.9 in the March quarter, still above the long-run average of 111.4. A reading above 100 indicates optimists outnumber pessimists, and the survey has been above that level since March 2011. The present conditions index decreased 0.2 points to 111.2 and the expected conditions index fell 1.9 points to 112.4.
A net 125 of the 1,555 people surveyed between March 1 and March 11 expected the economy to improve over the coming year, down from 18 percent in the December period, whereas a net 18% see better times for the economy over a five-year period, up from 17% in December.
"March's slight fall in confidence mainly reflected a little less optimism about the economic outlook over the next year," Westpac Banking Corp senior economist Satish Ranchhod said in his report. "That may reflect some anxiety about the upcoming election. It might also reflect concerns around housing affordability or political developments offshore, both of which continued to hit the headlines in recent weeks."
Government data last week showed New Zealand's economic growth slowed in the December quarter as a wet spring weighed on agricultural production. The economy has been underpinned by an expanding population, strong tourism and buoyant property market driving consumer spending, while firms have been able to generate enough new jobs to meet a net inflow of new migrants.
Today's survey showed a net 20% of consumers see now as a good time to buy big-ticket items, largely unchanged from the December quarter but below the 26% long-run average.
Mr Ranchhod said that was a healthy level of spending confidence, but was more directed at consumable items such as entertainment and hospitality rather than purchases of durable items.
"In part, this reluctance to spend may be related to the softening in the housing market since mid-2016," he said. "Households will often purchase new furnishings when moving home, but home sales have fallen more than 20% since last April."
The survey showed people's current financial situation deteriorated a little, falling 0.3 of a percentage point to a net 2.3% better off from a year earlier, and their expected financial situation down 0.1 to 7.6%.