Even as businesses grow ever more gloomy, consumers are feeling not too bad.
The latest ANZ-Roy Morgan survey of consumers rose a point to 121.8 in March, well above the neutral 100 point level and about average.
Perceptions of current conditions fell a point while the future conditions index rose 2 points and those households who think it’s a good time to buy a major household item fell a point, although ANZ New Zealand chief economist Sharon Zollner says the changes were “pretty much rounding errors.”
Yesterday, ANZ’s business confidence survey for March showed pessimism among businesses fell another 7 points in March and a net 38 percent now expect worsening general business conditions in the next 12 months.
And ANZ’s composite index of both consumer and business sentiment shows economic momentum has fallen considerably and has stabilised at a low level.
That suggests economic growth will average about 2.5 percent over the next couple of years, with slower population growth and weaker housing wealth effects weighing on consumption growth, she says.
“Overall, consumer confidence remains buoyed around its historical average despite mounting global and domestic risks,” Zollner says.
“Confidence has picked up from 2018 lows (the index fell to 115.4 points in October), but caution regarding the overall economic outlook appears to be preventing a break above average levels,” she says.
“However, a high proportion of people thinking it’s a good time to buy a major household item (a net 38 percent) suggests robust household spending despite weakness in Auckland house prices and slower housing market activity.”