Consumer sentiment rebounded in June to levels in line with historical averages. Sentiment is holding firm, and together with business sector equivalents, is consistent with a reasonable hum of positivity across the economy. House price expectations rose once again, hitting a new high.
Consumers continue to have a spring in their step.
- Consumer sentiment rebounded in June to levels in line with historical averages.
- Sentiment is holding firm, and together with business sector equivalents, is consistent with a reasonable hum of positivity across the economy.
- House price expectations rose once again, hitting a new high.
The ANZ-Roy Morgan Consumer Confidence Index bounced 3 points in June to 118.9, which is in line with its historical average. In seasonally adjusted terms confidence rose from 115 to 117, reversing May’s dip. The winter sniffles have been kept at bay.
Improvement was evident across all elements of the June survey. Key results include:
From a regional perspective, Auckland recorded the largest lift in confidence,
- Consumers feel better off financially. A net 10% feel better off compared with a year ago, which is the highest in over a year. An improving labour market and strong house price growth are clear feel-good factors.
- A net 36% believe it is a good time to buy a major household item. That’s up 2 points from May. No surprises there; when you feel wealthier, the wallet tends to open up. And the high NZD makes offshore goods cheap.
- Forward-looking indicators also had a ‘whistle while you work’ feel. Net optimism regarding both the short-term and longer-term economic outlook rose, from +6 to +9 and from +13 to +16 respectively. Both are within recent ranges, but add to the positive vibe.
- The Current Conditions and Future Conditions indices rose by 4 points and 2 points respectively. In seasonally adjusted terms, both recorded small rises. We wouldn’t go as far as to say consumers are on cloud nine, but there is certainly a happy-go-lucky tone.
to also be the most optimistic of the regions. Wellington confidence fell from high levels, but still took second place.
With consumer sentiment hitting a seven-month low in May, the pre-winter sniffles were threatening to turn into a full-blown cold.
The bounce in sentiment in June suggests consumers have kept the germs at bay.
We’ve stocked up on the vitamin C, stoked the fire, put on some woolly socks and are now feeling toasty and warm. The New Zealand economy is chugging along pretty well, despite clear strains in the dairy sector and the unease offshore. Even higher petrol prices have failed to make a dent. The domestic labour market continues to strengthen and Auckland house price love is now being shared by almost all other regions. The RBNZ is still talking about lower interest rates and the stronger NZD, while an issue for exporters, makes those larger consumer purchases or overseas travel more attractive.
That could all change; there remain some key risks offshore.
High levels of debt globally, China’s debt levels and misallocation of resources, Brexit (to be followed by Frexit, Spexit etc?), and political fragmentation are all worrying, and could change the domestic economic landscape.
But a reasonable level of confidence is an important part of absorbing and dealing with those risks.
Momentum and confidence can breed more momentum and confidence. It is reflected in our Confidence Composite,
which continues to flag a solid-to-strong pace of growth over the coming months. It is starting to suggest a potential acceleration in growth towards 4%. There are not many economies around the world experiencing that type of momentum at present. To be fair though, New Zealand should be growing strongly; the population is rising rapidly courtesy of booming migration. It’s a case of more bums on seats delivering more demand for goods and services.
Click here to download the latest ANZ-Roy Morgan New Zealand Consumer Confidence Release PDF - June 2016.
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The latest Roy Morgan Consumer Confidence Monthly Report is available on the Roy Morgan Online Store. It provides demographic breakdowns for Age, Sex, State, Region (Capital Cities/ Country), Generations, Lifecycle, Socio-Economic Scale, Work Status, Occupation, Home Ownership, Voting Intention, Roy Morgan Value Segments and more.
You can also view our monitor of Quarterly New Zealand Unemployment & Under-employment Estimates.