New Zealand: Consumer confidence slips in first quarter
March 18, 2013
In the first quarter, the Westpac-McDermott Miller consumer confidence indicator edged down to 110.8 points from the 111.1 points recorded in the fourth quarter. Notwithstanding the marginal fall, the index continues to hold above the 100-point threshold, which means that optimists outnumber pessimists.
According to Westpac, consumer confidence was "essentially flat over the last three months - households' expectations for the future slipped back slightly, but their perceptions of current conditions have continued to improve". Westpac argued that, despite the intensifying drought in North Island and recent reports of job losses, consumer sentiment is being buttressed by the ongoing Canterbury rebuild, low interest rates and healthy purchasing power as a result of a strong exchange rate.
FocusEconomics Consensus forecast participants expect private consumption to expand 2.1% this year, which is down 0.1 percentage points from last month's projection. For 2014, the panel sees private consumption increasing 2.3%.
Author: Ricardo Aceves, Senior Economist