Consumer confidence made a comeback in December, with a growing appetite to spend in the run-up to Christmas.
The ANZ-Roy Morgan headline index of consumer confidence lifted 3 points to 121.9 points in the latest month – a reading of 100 means pessimistic and optimistic consumers are balanced.
Within that index, the current conditions index lifted 3 points to 123.6 while the future conditions index rose 4 points to 120.8.
A net 36 percent of consumers think now is a good time to buy a major household item, up 4 percentage points from last month. Perceptions regarding the next year’s economic outlook lifted 7 percentage points to a net 14 percent – was the highest level since March. The five-year outlook remained steady at a net 18 percent.
“Consumers are feeling pretty good as Christmas approaches, with confidence lifting again to sit a bit above historically average levels. The proportion thinking it is a good time to buy a major household item bodes well for spending in the lead-in to Christmas,” said ANZ Bank New Zealand chief economist Sharon Zollner.
She noted, however, ANZ’s composite confidence gauge – which combines business expectations and intentions with overall consumer sentiment to capture both the demand and supply side of the economy – “continues to suggest momentum in the economy is set to slow.”
Business confidence improved from a low base in December, having soured towards the end of last year on political uncertainty when the new Labour-led government took office.
A net 24.1 percent of firms surveyed in the ANZ business outlook survey for December expect general business conditions to deteriorate in the coming 12 months, versus 37.1 percent in November.
“Business sentiment indicators appear to be reflecting factors other than turnover/activity at the moment,” said Zollner. She estimates GDP growth should hold up at 2.5-3 percent “for the foreseeable future.”
On Thursday, Statistics New Zealand said GDP expanded 0.3 percent in the September quarter, slowing from a 1 percent rise in the prior quarter, and was up 2.6 percent on the year.