New Zealand: Consumer confidence rises by a whisker at the outset of the year
March 19, 2012
The Westpac McDermott Miller consumer confidence indicator rose to 102.4 points in the first quarter of 2012, improving only slightly on 2011's Q4 101.3-point reading, which had represented the lowest level seen since the first quarter of 2011. Despite the improvement, the index continues to linger very close to the 100-point threshold that separates optimism from pessimism. The first quarter improvement reflected consumers' more optimistic view of the current economic situation, with the corresponding sub-indicator rising by 2.3 points to 98.5 points in the first quarter. The survey noted ?the ongoing uptrend in electronic card transactions and in the housing market, signs that household consumption might be gathering momentum?. However, the first quarter survey also suggests that ?based on historical patterns, households' continuing weak assessment of their finances, and a lack of enthusiasm about spending on big-ticket items, point to very weak consumption growth in early 2012?. Meanwhile, households' economic expectations for the year ahead remained virtually unchanged over the previous three-month period, with the corresponding sub-indicator inching up by only 0.3 points to 105.0 points in the first quarter. According to the survey, less pessimism prevails among consumers regarding their economic prospects for the next five years.
Author: Ricardo Aceves, Senior Economist