Consumer confidence weak

Photo / Natalie Slade

Consumer confidence has fallen in the latest ANZ-Roy Morgan Consumer Confidence survey and a nosedive in confidence has been recorded in responses to a question regarding whether it is a good time to buy a major household appliance.

The survey's main confidence measure eased three points to 113.6 and its current conditions index dropped 11 points to 92.3. The current conditions index has dropped below the 100 mark for the first time since December 2009 and is at its lowest point since August 2009.

Underpinning the drop in confidence was a 25 point plummet in the question regarding whether it is a good time to buy a major household appliance.

A net 7 per cent believe it was a bad time to buy a major household item.

Such a large fall suggested the goods and services tax rise has been influential.

"However, the decline in current conditions does not bode well for immediate appetites to spend regardless. We note that the question in regard to whether it was a good time to buy a major household item did not blip up notably pre-GST," the survey's authors said.

A net 9 per cent of consumers still feel worse off relative to a year ago, but this was up three points on September.

The one-year economic picture and five years out rose 3, 5 and 1 point, respectively.

A new question on house prices revealed that consumers expect house prices to rise by 1.6 per cent per year.

The impact of expected limited house price gains means that discretionary spending will need to be underpinned from income generation instead of wealth gains as has been the trend over the past two decades.

- NZPA