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NZ consumer confidence improves in October

NZ Newswire logoNZ Newswire 13/10/2016 Paul McBeth

New Zealand consumer confidence rose in October as rising house prices and a strong labour market keep people upbeat, further supporting economic growth.

The ANZ-Roy Morgan consumer confidence index increased to 122.9 last month from 121 in September, with people more optimistic about the country's outlook.

The current conditions index slipped 1.4 points to 122.7, while the future conditions index gained 4.1 points to 123.1.

New Zealand's economy has been underpinned by an expanding population, strong tourism, and a buoyant property market stoking consumer spending, while the labour market has remained robust with new jobs being created for the inflow of migrants.

"GDP (gross domestic product) growth is accelerating and the unemployment rate has fallen to 5.1 per cent as good candidates become harder to find," ANZ chief economist Cameron Bagrie said.

"House prices remain a strong platform for homeowners and dairy prices have crossed the floor. No wonder consumers are electing to be liberal with their spending."

ANZ's composite confidence gauge, which combines the business and consumer indicators, estimate annual GDP growth rising to 4 per cent through the rest of the year, though Bagrie said a lack of capacity seems a more likely hindrance than dwindling demand.

"We expect wage growth to start to move higher soon, which would be another positive for consumers," he said. "There is little debate: people are feeling pretty good."

A net 11 per cent of the 1,001 people surveyed said they were better off now than a year ago, unchanged from September, while a net 30 per cent expect to be in a stronger financial position 12 months from now, compared to 31 per cent a month ago.

More people see the economy improving with a net 21 per cent predicting better times for the nation over the coming 12 months, compared to 12 per cent in September, and 18 per cent have an upbeat five-year outlook, up from 14 per cent.

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