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1/10/2018 — General
Consumer confidence better than business confidence
By Simon Hartley

Consumer confidence has remained steady during September, appearing to ignore business confidence which has been pessimistic for much of the past three months.

The ANZ Roy Morgan consumer confidence index was unchanged at 117.6 points in September, matching its long run average, according to ANZ Bank New Zealand economist Liz Kendall.

“The growth indicators out of business surveys are impacted around times of political change, and we await further evidence to assess how large the growth hiccup may prove,” she said.

“The economic headwinds are real with both the growth drivers of house prices and the population fading, while commodity prices appeared to have peaked. But monetary conditions and fiscal policy are stimulatory, and barring a global shock, we suspect the economy will muddle through,” Ms Kendall said.

The survey found consumers' perceptions of their current financial situations were unchanged, with a net 12% feeling financially better off than a year ago, and a net 27% expected to be better off financially this time next year, up by one point.

However, on the question of whether now was a good time to buy a major household item, that fell six points to 29% of the 1,009 respondents, which was the lowest in three years.

“Perceptions of current conditions remain strong, but there is some caution about the future, particularly around the broader economy rather than respondents' own financial situations,” Ms Kendall said.

The composite confidence gauge, which combines the recent business and consumer surveys, indicates slowing economic growth.

Government data last week showed gross domestic product grew 1% in the second quarter, and 2.7% annually, which beat expectations of analysts and the Reserve Bank, she said.

*Simon Hartley is senior business reporter and assistant chief reporter for the Otago Daily Times.

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