Gloomy Outlook, But Most Feel Unaffected

FOR IMMEDIATE RELEASE

3 February 2009

Gloomy Outlook, But Most Feel Unaffected
Booze The Last Thing To Cut Back On In Recession

While a large majority of Kiwis see the economy and unemployment getting worse, most are not cutting back on spending and don’t think things will get a lot worse than they are now.

These are findings from UMR Research’s most recent survey of a nationally representative sample of 750 New Zealanders aged 18 years and over [UMR’s fortnightly telephone poll randomly samples n=750 New Zealanders aged 18 years and over. It has a margin of error of + 3.6%. The survey on the economic outlook was conducted between 23-26 January 2009.
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81% of New Zealanders say unemployment will increase in the year ahead and 72% think the economy will get worse. However, most people (56%) think the global financial crisis will only get ‘a little bit worse’ or think things are ‘as bad as it will get.’ Even so, almost half (41%) think the global crisis will get ‘a lot worse’ or that ‘it will lead to a depression’.

“There’s a lot of concern out there, but that doesn’t seem to have translated into a feeling for most people that they will be affected too much. For instance, 72% are concerned about the impact of the international economic meltdown on the New Zealand economy, but most (55%) are not worried about losing their job,” a Director of UMR Tim Grafton said.

“Even so, the mood is starting to change. In December, 52% thought the economy would pick up in a year or less, but that figure is now down to 36% and interestingly that’s closer to where the Australians (39%) were in November. People also think it will take longer for the economy to recover with 53% now expecting it to recover in 2-3 years, but only 37% thought that way in December.” he said

One in four (25%) say their family’s standard of living will be better in the year ahead and another 42% say it will be no different. Even so a large minority (31%) say their standard of living will be worse off.

“There’s no doubt retailers are going to face a tougher year as almost half (39%) intend to spend less this year, but just where people are prepared to cut-back varies a lot. For instance, only 24% say they will cut-back on booze, but 47% say they will be spending less on eating out and going to restaurants and 42% will spend less on entertainment,” he said.

The number one target for cut-backs are consumer goods with 54% saying they will spend less on them, followed by eating out (47%), then clothes and fashion (45%), entertainment (42%), holidays (40%), driving your car (33%), food and groceries (33%) and alcohol (24%).

“It’s not all doom and gloom for retailers - there’s still 60% of us who say we will spend more or about the same in the coming year. Falling interest rates will be reducing costs for borrowers and this may buoy up some of the spending.” he said.

The survey showed 63% expect interest rates to go down further in the year ahead.

And research conducted by UMR in Australia late last year showed there is significantly more belt-tightening across the Tasman . There, 61% say they will spend less on consumer goods, eating out in restaurants and clothes and fashion, 59% will spend less on entertainment, 58% on holidays, 42% on food and groceries, 38% on alcohol and 37% on driving the car.

Attached: Global_Financial_Crisis_A_New_Zealand_Persective_Jan09.pdf

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