New Zealand Consumer Confidence May 2021

New Zealand

New Zealand: Consumer confidence edges down in May

May 28, 2021

The ANZ-Roy Morgan consumer confidence indicator dropped down to 114.0 in May from April’s 115.4. That said, it remained comfortably above the 100-threshold that separates optimism from pessimism among consumers.

May’s downturn was largely driven by consumers’ deteriorating confidence with regards to the one-year general economic outlook. Moreover, households’ assessments of their financial situation compared to one year ago worsened, while answers also highlighted that consumers were less inclined to buy major household items compared to the prior month.

Commenting on the release, Sharon Zollnern analyst at ANZ, reiterated that consumers inflation expectations remain high:

“Meanwhile, households continue to expect inflation. […] Household inflation expectations are typically too high, and can be volatile, but that doesn’t mean they don’t matter. Higher household inflation expectations make it easier for retailers to raise prices without fear of customer backlash, and can also impact wage demands if the labour market is tight, which a range of indicators suggest it is.”

FocusEconomics panelists project private consumption to grow 4.9% in 2021, which is down 0.2 percentage points from last month’s forecast. They see it expanding 2.7% in 2022.

Author: Massimo Bassetti, Senior Economist

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New Zealand Consumer Confidence Chart

New Zealand Monthly Consumer Confidence May 2021

Note: Monthly consumer confidence index. An index number over 100 indicates more optimists than pessimists, while a number under 100 indicates more pessimists than optimists.
Source: ANZ-Roy Morgan NZ Consumer Confidence Survey.

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