New Zealand: Consumer confidence declines in the final quarter of the year
December 19, 2011
Consumer confidence fell in the fourth quarter as a more pessimistic view of present economic conditions and a less optimistic assessment of consumers' future economic prospects weighed down on the overall result. The Westpac McDermott Miller consumer confidence indicator declined to 101.3 points in the fourth quarter. The reading represented the lowest consumer confidence level seen since the first quarter of 2011, when consumer mood dived to 97.9 points following the devastating February Christchurch earthquake. Consequently, the index now lies very close to the 100-point threshold that separates optimism from pessimism. The fourth quarter reading reflected consumers' more pessimistic assessment of the current economic situation, with the sub-index of present economic conditions falling 9.4 points, from 105.7 points in the third quarter to 96.2 points in the fourth. According to the survey, ?economic optimism has fallen sharply, and households are also much less willing to spend on large items than they were in September.? Moreover, respondents to the fourth quarter survey were less optimistic about their future economic prospects, with the sub-index of future economic conditions diving 11.5 points from 116.3 points in Q3 to 104.7 points in Q4. According to the survey, pessimism prevails among consumers regarding their economic prospects for the next five years.