NZ consumer confidence dips in March, still upbeat

Net optimism toward the economy eased, but remained above average. Photo / NZME

New Zealand consumer confidence dipped in March as net optimism toward the economy eased, but remained above average.

The ANZ-Roy Morgan consumer confidence index decreased to 125.2 from 127.4 in February, still above the average of 118. The current conditions index slipped to 125.9 from 128 while the future conditions index eased to 124.8 from 127.

"The data continues to signal a good tempo for spending trends and economic momentum," said ANZ Bank New Zealand chief economist Cameron Bagrie.

New Zealand's economy has been underpinned by an expanding population, strong tourism, and a buoyant property market stoking consumer spending, while the labour market has remained robust with new jobs being created for the inflow of migrants.

ANZ's composite confidence gauge, which combines the business and consumer indicators, continues to estimate annual GDP growth rising past 4 per cent through the rest of the year. Bagrie said the bank doesn't think the economy will grow that fast - at least not for long - but the overall message is that the economy is showing "little sign of a turn".

Government figures yesterday showed the economy grew at an annual pace of 2.7 per cent in the December quarter, slowing from the September period as a wet spring weighed on agricultural production. Still, forward-looking indicators including today's Bank of New Zealand-BusinessNZ performance of manufacturing index were projecting a recovery in the first three months of 2017.

Today's ANZ report showed a net 13 per cent of the 1,004 people surveyed said they were better off now than a year ago versus a net 15 per cent in February. However, a net 32 per cent expect to be in a stronger financial position 12 months from now, compared to 31 per cent a month ago.

More people still see the economy improving this year with a net 21 per cent predicting better times for the nation over the coming 12 months, compared to 26 per cent in February, while 22 per cent have an upbeat five-year outlook, down from 24 per cent.

Households were still optimistic about spending with a net 38 per cent saying now was a good time to buy a big-ticket item, down from 41 perc ent in February. Annual inflation expectations eased to 3.4 per cent from 3.6 per cent. House price inflation expectations for the next two years rose to 4.6 per cent from 4.3 per cent in February.