NZ consumer confidence sinks to 10-month low amid signs growth has peaked
By Jonathan Underhill
Aug. 21 (BusinessDesk) - New Zealand consumer confidence fell to a 10-month low in August, suggesting rising interest
rates, weaker commodity prices and waning house price inflation are denting sentiment in an economy that may be growing
at a slower pace.
The ANZ-Roy Morgan Consumer Confidence Index fell 7 points to 125.5, snapping two months of gains. The current
conditions index eased to 123.4 from 126.3 and the future conditions index dropped to 126.9 from 137.
Confidence dipped across all indicators in the survey. Those saying they were better off financially than a year ago
fell to a net 7 percent from 9 percent, while those expecting to be better off in a year's time fell to 35 percent from
40 percent. The survey comes after the Treasury this week shaved its forecasts for economic growth, while still seeing
enough tax revenue to return to surplus next year.
"The economy may be moderating from a gallop to a canter but we're still growing solidly," said Cameron Bagrie, chief
economist at ANZ New Zealand Bank. "Various leading indicators of momentum - the tightening in financial conditions and
lower commodity prices - foretell a deceleration in growth. Conversely, lagging indicators such as employment growth
remain more robust."
The August survey shows those expecting New Zealand as a whole will enjoy good economic times in the year ahead fell to
a net 20 percent from 34 percent, while looking five years out, it fell to a net 26 percent from 38 percent.
Asked whether it was a good time to buy a major household items, a net 40 percent said yes, down from 44 percent a month
ago. Those expecting prices in general to rise in the next two years fell to a net 3.3 percent from 3.9 percent. Those
seeing a rise in house prices in that period slipped to a net 3.6 percent from 4.1 percent.