Consumer confidence slips as kiwis save more cash

The decline in sales is across the board in the retail sector. Photo / APN

New Zealand's consumer confidence fell in October from a month earlier as kiwis remain cautious about spending money and put more aside for a rainy day.

The ANZ-Roy Morgan Consumer Confidence fell to 110.5 in October from 111.9 in September. A reading above 100 indicates there are more optimists than pessimists. The Current Conditions index decreased 2 points to 110, while the Future Conditions index slipped 1 point to 111.

"Households have become more circumspect over the future and have pared back lofty expectations on the general economic outlook as the reality of a moderate medium-term growth environment sinks in," ANZ senior economist Mark Smith said in a statement.

"We are not talking about outright falls in spending, merely that future increases are likely to remain below income growth as household saving buffers are rebuilt and balance sheets are repaired," he said.

Consumers still feel financially worse off than a year ago, with sentiment slipping 1 point to minus 9 and are slightly less upbeat regarding their own financial situation down 3 points to 23.

Views towards the general economy 12 months from now were unchanged on minus six, while a net 7 per cent of respondents expect weaker economic times over the next year. Sentiment towards the economy five years from now slipped 6 points to 17 points.

It is still seen as a good time to buy a big ticket item, with the net balance at 26 points, the lowest since June.

Today's survey showed inflation expectations rose 0.2 per cent to 3.6 per cent. Expectations were high among females, the over-50s and in Auckland. House price expectations for these groups were also higher than average.

Auckland reported the highest level of confidence and tops the expectations for future conditions. Confidence in Wellington slipped 8 points to 110 points and Canterbury fell 8 points to 108 points.