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New Zealanders’ attitudes to employment cause confidence drop – MasterCard

New Zealand optimism softens, but still more positive than Australia

New Zealand, March 22, 2015 – Despite a drop, New Zealanders’ are still significantly more positive about the economy than their Australian counterparts, according to the latest MasterCard Index of Consumer Confidence (MICC)

New Zealand’s score in the biannual survey was 52.0 overall, 10 points ahead of Australia’s overall score of 42.4. New Zealanders’ attitudes to employment dropped 17.5 points to 41.8 in the survey although the unemployment rate remained steady, and regular income remains stable and very optimistic at 75.3.

MasterCard New Zealand Country Manager, Peter Chisnall, said the results show New Zealanders feel generally positive about their own lives, but slightly uncertain about the economy and their employment prospects for the next six months.

“The results from our latest research are in line with recent reports of lower job numbers being advertised and employers feeling cautious about hiring in early 2016. New Zealanders are feeling positive about their regular income overall, but uncertain about employment prospects on the horizon. We can see the effect of these results in the way consumer confidence is impacting the choices people make, by being more settled and risk adverse,” Chisnall said.

Despite the attitude to employment dropping in New Zealand, it was still ahead of the low Australian Index result at 39.0 points, even with a 7.4 point gain. The employment indicator for Australia has been below 40 for the last nine surveys, since late 2011.

Consumer confidence in New Zealand has decreased in people aged over 45 years, at 40.2 points, and is highest amongst those in the 30 – 44 year age bracket.

“Consumer confidence results we see here combined with trends such as a lower than forecasted dairy prices and recent cuts to the Official Cash Rate point to a slightly subdued market outlook.

“New Zealanders feel somewhat unsure about the performance of the economy and less positive about their future employment prospects than previous surveys, however it is nowhere near our lowest recorded score of 21.5 in 2009,” Chisnall said.

Throughout the Asia Pacific, markets remain optimistic – levels of optimism have dropped to 59.7 Index points compared to 66.1 Index points for the six-month period prior, and New Zealand remains below the Asia-Pacific average.

“Developing markets are showing signs of improvement, with Myanmar, Vietnam and India topping the list, while the more developed, such as Australia and New Zealand, show decreased confidence and uncertainty,” said Chisnall.

When compared to the rest of Asia Pacific results, New Zealand ranked 10th, while Australia placed 15th out of the 18 surveyed markets.
“The state of the New Zealand economy is reflected in the stable consumer confidence reading, as people think there is room for improvement but feel relatively steady overall. The MasterCard Consumer Confidence Index has been going for twenty years, and a historical repository and leading indicator with insights into the minds of New Zealand consumers,” says Chisnall.

Between November and December 2015, 8,779 respondents, aged 18 to 64 in 17 Asia Pacific markets, were asked to give a six-month outlook on five economic factors including the economy, employment prospects, regular income prospects, the stock market and their quality of life.

MasterCard Index of Consumer Confidence New Zealand:

Component	Current Status	Change from last half
Overall MICC	52.0	Neutral +	-5.7	Some deterioration
Employment	41.8	Neutral –	-17.5	Significant deterioration
Economy	48.1	Neutral –	-3.9	Stable -
Regular income	75.3	Very Optimistic	-2.5	Stable -
Stock market	48.6	Neutral –	-9.0	Some deterioration
Quality of life	46.2	Neutral –	+4.4	Stable +

Methodology
Respondents were asked five questions pertaining to their six-month outlook on the economy, their employment prospects, the local stock market, their regular income prospects, and their quality of life. The results of their responses were converted in five component indexes which were subsequently averaged to form the MasterCard Index of Consumer Confidence (MICC) score. The MICC Index score and the 5 component index scores range from 0 – 100 where 0 represents maximum pessimism, 100 represents maximum optimism and 50 represents neutrality.

ENDS

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