Consumer confidence snaps four months of declines in September as outlook perks up

New Zealand households were a little perkier in September, ending a four-month slide, as the pessimism over the nation's economic outlook eased.

The ANZ-Roy Morgan consumer confidence index rose 1 point to 110.8 from a three-year low in August. The current conditions index fell to 114.9 from 117.2, while the future conditions component increased to 108.1 from 104.9.

"Though one can never read too much into one month of data, it is encouraging," ANZ Bank New Zealand chief economist Cameron Bagrie said. "The level of confidence is neither elevated nor poor, though certainly has a less buoyant feel relative to prior years."

Local firms have been gloomier about the economic outlook in recent months as a slump in global dairy prices threatens farm incomes, and prompted the Reserve Bank to start cutting interest rates in June. Households have been more circumspect, with government data yesterday showing private expenditure grew 0.9 percent in the June quarter, largely on a pick up in spending on services, though an expanding population and tepid inflation has kept a lid on wage growth.

Today's survey showed a net 6 percent of the 1,003 respondents felt financially better off now than they did a year earlier, largely unchanged from the 7 percent level a month earlier, and a net 26 percent expect to be better off in 12 months' time, up from 23 percent in August.

On the economy, a net 12 percent expect the economy will deteriorate over the coming 12 months, down from a net 16 percent of pessimists in August, and a net 11 percent predict better times ahead over the next five years, up from 8 percent.

A net 24 percent see it as a good time to buy major appliances, down from 27 percent in August, which Bagrie again attributed to the weaker New Zealand dollar which increases the price of imported goods.

Inflation expectations were largely unchanged, with respondents picking an annual increase in consumer prices of 3.6 percent over the next two years, while house prices are seen rising at a 5.2 percent pace.

(BusinessDesk)