New Zealand: Consumer confidence still high despite moderation in Q2
June 19, 2014
The Westpac-McDermott Miller consumer confidence indicator decreased from the 121.7 points recorded in Q1 to 121.2 points in Q2. The reading marked the lowest level since Q4 2013. However, the index is still far above the 100-point threshold indicating that optimists outnumber pessimists.
According to Westpac, the slight decrease in Q2 reflected that consumers’ rising optimism about current economic conditions was more than offset by a deterioration in expectations regarding the future economic outlook. The survey indicated that consumers’ willingness to spend money on big ticket items—major household items, for example—increased compared to the previous survey. However, consumers assessed the state of their own finances slightly less positively. Despite the fact that consumers were significantly more pessimistic regarding the country’s near-term economic perspectives, they were slightly more confident regarding expectations for their own finances in the future. According to Westpac, the slight decrease in consumer confidence in Q2 may have been caused by a drop in global dairy prices, a sluggish housing market and the fact that the Central Bank has begun the interest tightening cycle.