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Consumer confidence dips in June quarter

NZ NewswireNZ Newswire 19/06/2016 Paul McBeth
<span style="font-size:13px;">Consumer confidence has dipped in the June quarter despite better-than-expected GDP figures last week.</span> © Getty Consumer confidence has dipped in the June quarter despite better-than-expected GDP figures last week.

Consumer confidence fell in the June quarter as Kiwis become increasingly nervous about an economy being driven by population growth while per-capita growth stalls.

The Westpac McDermott Miller consumer confidence index fell 3.7 points to 106 in the June quarter, below the long-run average of 111.5. A reading above 100 indicates optimists outnumber pessimists.

The presented conditions index was down 1.7 points to 110, while the expected conditions index dropped 5 points to 103.3.

The survey follows figures last week showing gross domestic product expanded 0.7 per cent in the March quarter although that was underpinned by population growth with the economy increasing just 0.1 per cent on a per capita basis.

A net 1.3 per cent of the 1,555 people surveyed expect the economic outlook to deteriorate over the coming year, compared to a net 1.4 per cent seeing an improvement in the March quarter.

A net 7.2 per cent see better times over a five-year horizon, down from 17 per cent three months earlier.

Westpac senior economist Satish Ranchhod said the increase in population has provided a buffer from headwinds facing the economy, but that hasn't stretched to households.

"Households, particularly those on middle incomes, have become increasingly worried about where the economy is heading over the next few years," Mr Ranchhod said.

"The number of households expecting favourable conditions over the next year has fallen for the second quarter, and the number expecting positive economic conditions in five years time has plummeted to the lowest level in 25 years."

Still, the survey showed respondents were less pessimistic about their current financial situation.

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