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Consumer confidence dips in March

NZ Newswire logoNZ Newswire 19/03/2017 Paul McBeth
Currency traders are awaiting US durable goods orders, services and consumer confidence data as they size up the chances of a US rate hike. © File photo Currency traders are awaiting US durable goods orders, services and consumer confidence data as they size up the chances of a US rate hike.

New Zealand consumer confidence dipped in the March quarter as people grew wary about the short-term economic outlook, but extended the nation's run of optimism to six years.

The Westpac McDermott Miller consumer confidence index, released on Monday, declined 1.2 points to 111.9 in the March quarter, still above the long-run average of 111.4.

A reading above 100 indicates optimists outnumber pessimists, and the survey has been above that level since March 2011. The present conditions index decreased 0.2 points to 111.2 and the expected conditions index fell 1.9 points to 112.4.

A net 12 per cent of the 1555 people surveyed expected the economy to improve over the coming year, down from 18 per cent in the December period.

A net 18 per cent see better times for the economy over a five-year period, up from 17 per cent in December.

"March's slight fall in confidence mainly reflected a little less optimism about the economic outlook over the next year," Westpac senior economist Satish Ranchhod said in his report.

"That may reflect some anxiety about the upcoming election. It might also reflect concerns around housing affordability or political developments offshore."

Monday's survey showed a net 20 per cent of consumers see now as a good time to buy big-ticket items, largely unchanged from the December quarter but below the 26 per cent long-run average.

Mr Ranchhod said that was a healthy level of spending confidence, but was more directed at consumable items such as entertainment and hospitality rather than purchases of durable items.

"Households will often purchase new furnishings when moving home, but home sales have fallen more than 20 per cent since last April."

The survey showed people's current financial situation deteriorated a little, falling 0.3 of a percentage point to a net 2.3 per cent better off from a year earlier, and their expected financial situation down 0.1 to 7.6 per cent.

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