ANZ says Kiwi consumers are still cautious about the economy. Photo / 123RF
ANZ says Kiwi consumers are still cautious about the economy. Photo / 123RF
Consumers are feeling better but not positive about the economy, according to ANZ.
The ANZ-Roy Morgan consumer confidence index showed today that consumer confidence is still at an “extremely low level”.
Consumer confidence was up 1 point on March, coming to 79.3 in April.
A net total of 6 per cent of consumers expected to be financially better off this time next year, up 5 per cent from March, however perceptions about the economy for the next 12 months fell 4 points, down to -50 per cent.
ANZ chief economist Sharon Zollner said households are concerned about the rising cost of living, especially those in large amounts of debt.
“While jobs are still plentiful, the economy is beginning to slow, and media articles about tougher times ahead are common”.
The survey found inflation expectations eased from 5.4 per cent to 5.2 per cent in April after “bouncing around a narrow range for the last six months”.
Feelings about consumers’ current personal financial situations are up 1 per cent at -25 per cent while 31 per cent think it’s a bad time to buy a major household item, also up 1 per cent.
The five-year-ahead measure recovered somewhat, lifting from ‑10 per cent to -2 per cent.
ANZ Bank chief economist Sharon Zollner. Photo / Dean Purcell
Consumers are also feeling better about house price inflation with 0.3 per cent concerned, down from 0.6 per cent, but this sentiment is stronger for residents of Wellington and Auckland at 0.9 per cent.
Zollner said Kiwis are still cautious about the economy.
“Consumers continue to give very wary answers to questions about their financial wellbeing both now and into the future.”
The current conditions index was little changed at 71.7, while the future conditions index is somewhat chirpier at 84.4, “though still well under par”.
She said, “Inflation remains high, interest rates have risen quickly and talk of recession is unsettling for people. Budget and election uncertainty could also be weighing. There’s plenty going on, and very little certainty to be had.”
Zollner said consumers surveyed are concerned about spending, however retail spending is staying strong. She said this could be due to tourism making a comeback.
She said household inflation expectations are “proving more stubborn than those of businesses”, but it is positive they are not trending upwards.
“As long as the labour market remains on the tighter side of par, consumer inflation expectations are likely to matter more than otherwise, as wage demands are more likely to be met”.
The index has been largely unchanged for three months now.
Zollner said the overall message for Te Putea Mātua (RBNZ) from the survey would be that they were “on track”.
“The RBNZ will be encouraged to see the ongoing fall in the inflation indicators in the survey. While there’s still a way to go, inflation is set to continue easing over the year ahead, as they and we are forecasting.
“It’s important to note that the data does not represent a ‘surprise’ for the RBNZ; rather, it’s what they will be expecting to see if their forecasts are to come to fruition, with the OCR able to top out shortly.”
