Consumers more confident as outlook improves

BUSINESSDESK: New Zealand consumer confidence lifted in April, suggesting a pick-up in the local economy as households feel more optimistic about their financial well-being.

The ANZ-Roy Morgan Consumer Confidence index rose to 114.0 in April from 110.2 in March, where a reading above 100 indicates there are more optimists than pessimists.

The Current Conditions index advanced 7 points to 111.6, while the Future Conditions index rose 2 points to 115.7.

“Consumer confidence looks to be improving, though we need to see successive monthly lifts to make sweeping statements,” Cameron Bagrie, chief economist at ANZ New Zealand, said in his report.

“Lifts in consumer sentiment suggest the economy is gaining momentum, though we need to be mindful that New Zealand’s net external debt position demands the domestic economy does not lead the recovery too far.”

Government figures showed household spending continued to rise in the final three months of last year, growing 0.8% for an 11th straight gain, though that demand has been mixed in the early months of this year.

Today’s survey showed three of five sub-segments that make up consumer confidence improved.

A net 4%of households felt worse off compared to a net 10% in March, while expectations for a year from now showed a net 28% of respondents thought they’d be better off, up from the previous month’s 23%.

It is still perceived as a good time to buy big ticket household items with sentiment rising 8 points to a net 28%.

Views towards the economic picture 12 months ahead and the five-year outlook were broadly unchanged at a net minus 3% and plus 20% respectively.

On a regional basis, confidence rose everywhere except in Canterbury, after the region recorded its sharpest lift in sentiment in March since the first earthquake on September 4.

The South Island, excluding Canterbury, was the most confident region, up 10 points to 123.4, while Auckland recorded the second highest increase on 120 points from 118.5 in March.

Confidence rose across all age groups except those between 35 to 49 years.

Female confidence continued to rise in April, up 3 points to 109.7, while male confidence increased 7 points to 118.6 after a decline in March.