Consumer confidence has dropped, particularly in earthquake-hit Canterbury.
The ANZ-Roy Morgan Consumer Confidence measure dropped seven points to 101.4 in March. It has fallen by 16 points since the start of the year and is now at the lowest reading since March 2009.
Confidence in the Canterbury region dropped themost, falling 16 points to 96.5 to be the only region below 100. Canterbury's drop in sentiment was dominated by a 37 point fall in a measure of perceived future conditions to 99.9. Current conditions in Canterbury, which were already at a low level, remained unchanged at 91.4 in March.
But the survey's authors are encouraged that confidence did not drop more after the magnitude 6.3 earthquake devastated Christchurch on February 22. The survey is the first barometer of confidence since the earthquake.
"Yes, confidence declined notably and especially in Canterbury. Yet the scale of Christchurch developments could well have fostered a larger decline and one of the reasons the Reserve Bank of New Zealand cut interest rates in March was to counter a likely deterioration in confidence.
"However, we recognise that the overall level of consumer confidence was already low - with current conditions below the neutral 100 level in February," the report said.
The current conditions index fell two points to 94.1 and the perception towards households' current financial position actually improved from minus 20 to minus 16. But fewer households now believe it is a good time to buy a major household item.
A net 28 per cent of respondents expect worse times financially for the economy over the coming 12 months, down from a negative 5 per cent in February.
