Consumer confidence falls again

Consumer confidence fell slightly in December, the fourth month in a row it has dropped.

The ANZ-Roy Morgan Consumer Confidence Survey, released today, showed the level of confidence was at 108.4, down from 109 in November.

It's current reading is eight points below its historical average level.

However, its not all bad news.

Although the cautious mood means there's unlikely to be a big Christmas spend-up, the survey found that fewer people were feeling financially worse off than last year.

“The local economy has proven reasonably resilient, against a background of global fragility,” it said.

Despite the negative headlines coming from overseas, the survey noted that unemployment was relatively static on 6.5%, gross earnings were higher than a year ago, those with fixed rate mortgages coming up for renewal could see lower borrowing costs and food prices have fallen for three consecutive months.

Unfortunately, that is offset with the realisation that a decade of overspending has weakened household's balance sheets, it said.

“Restoration requires saving more and spending less, a key reason the current conditions index – the key driver of spending today – has hovered around the 100 mark for successive years, even as optimism about the future rose strongly.”

Among the regions, confidence in Auckland fell the most for the second consecutive month, going from 112.8 to 109.5.

“We noted last month that we found it surprising then, and we find it surprising again this time,” the survey said. “Particularly as Auckland now has the second lowest confidence level.”

Canterbury is now the most optimistic region, with a reading of 112.7, the survey found, while the mantle for least optimistic region stays with the remainder of the North Island at 103.6.

Colin Williscroft
Fri, 09 Dec 2011

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Consumer confidence falls again