New Zealand: Consumer confidence slips in July
The ANZ-Roy Morgan consumer confidence indicator fell from 120.0 in June to 118.4 in July, marking the lowest print since August 2016. Nevertheless, the index remained comfortably above the 100-point threshold that separates optimism from pessimism among consumers.
July’s drop mainly reflected a steeper decline in the future conditions index over the previous month. Households’ outlook of the general economic situation in one year’s time deteriorated to the lowest level in over two years while their five-year economic outlook worsened for the fifth consecutive month. Moreover, consumers turned slightly less optimistic about the prospect of being financially better off in one year. The current conditions index also lost ground, with consumers’ willingness to buy major household items dipping in July. However, consumers grew more upbeat over their current financial situation compared to June.
All told, the headline indicator came in just below the historical average in July. But this mainly reflects consumers becoming slightly warier about the general economic situation in the future, which is in line with soft economic data recently released. Nevertheless, households’ perceptions over their current financial situation remain solid. A tight labor market and low interest rates should continue to support consumer confidence ahead.