New Zealand: Consumer confidence reaches highest level in nine years
March 17, 2014
The Westpac-McDermott Miller consumer confidence indicator increased from 120.1 points recorded in Q4 2013 to 121.7 points in Q1 2014. The reading marked the highest level since Q1 2005. As a result, the index rose even further above the 100-point threshold indicating that optimists outnumber pessimists. According to Westpac, the strong increase in Q1 reflected consumers' rising optimism about the near-term economic perspectives and the state of their own finances. Surprisingly, the survey indicated that, despite this optimism, consumers' willingness to spend money on major items-major household items, for example-has decreased compared to the previous survey. According to Westpac, this fact might be caused by the recent introduction of mortgage lending restrictions, rising fixed-term mortgage rates and further housing market concerns. FocusEconomics Consensus forecast participants expect private consumption to expand 3.1% this year, which is unchanged from last month's projection. For 2015, the panel sees private consumption increasing 2.4%, which is also unchanged from last month's projection.
Author: Armando Ciccarelli, Head of Data Solutions