Confidence up; economy about as upbeat as a coroner's retirement speech
Index drops but remains near historic average.
Consumer confidence dipped slightly in March, but remained near the historical average, according to the latest ANZ-Roy Morgan Consumer Confidence Index.
The index slipped 1.7 points to 118 in March, in line with the historical average of 119.
Future expectations fell 0.5 points to 116.2, below the long-term average while current expectations dropped three points to 120.8, ahead of the historical average of 115.
"Consumers continue to go about their daily business," ANZ Bank New Zealand's chief economist Cameron Bagrie says.
"Net on net, consumers seem to think things are okay. We concur. The economy is hopping along at a reasonable pace. Importantly, it's a speed that is more sustainable for longer-term prospects."
Mr Bagrie noted the risks to New Zealand from improved oil prices, weak dairy and downbeat global sentiment, which he described as "about as upbeat as a coroner's retirement speech."
"Employment may be up, but wages are not moving by much," he says.
"Low(er) interest rates are great for borrowers, but what about the savers, or those headed into retirement? Suddenly the nest-egg looks decidedly hollow."
Expectations for the economy over the year ahead fell five percentage points to a net 3% of respondents believing there would be good economic times, while expectations further out to five years ahead rose two percentage points to a net 17% optimistic.
Inflation expectations fell to an 11-month low of 2.9%, from 3.4% in January, which Mr Bagrie says is likely pushed by low rates of current inflation.
A net 8% of respondents say they feel financially better off than a year ago, down one percentage point, while positive expectations 12 months ahead rose to a net 29%, from 27% last month.
Fewer consumers thought it was a good time to buy a major household item, with the reading dropping to a net 34% from January's 40%.
Canterbury and Wellington's confidence improved, with the capital now at a nine-month high, while Auckland dropped.
This offset continued gloom in the regional North and South Island, which might be driven by renewed dairy woes not offset by low interest rates, Mr Bagrie says.
Nationwide house price expectations grew to a 4.4% predicted increase, with Wellington the top spot at 5.4%.
(BusinessDesk)
Sophie Boot
Fri, 18 Mar 2016
Fri, 18 Mar 2016
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Confidence up; economy about as upbeat as a coroner's retirement speech
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