NZ ANZ-Roy Morgan consumer confidence falls in September, lowest in four years

New Zealand’s ANZ-Roy Morgan Consumer Confidence Index fell 4 points to 114 in September, led by wariness of the future. The Current Conditions Index fell 1 point to 126, while the Future Conditions Index fell 6 points to 106.

Consumers’ perceptions of their current financial situation fell 5 points to a net 11 percent feeling financially better off than a year ago. A net 23 percent of consumers expect to be better off financially this time next year, down 4 points versus last month.

A net 41 percent think it’s a good time to buy a major household item, up 2. Perceptions regarding the next year’s economic outlook fell a sharp 9 points to a net 10% expecting conditions to worsen, the lowest in four years. The five-year outlook fell 7 points to +4 percent.

Sharp falls in confidence in Wellington (down 10) and Canterbury (down 6) led the drop in the index, but Wellington is nonetheless still the most optimistic region. Confidence fell in every region. House price inflation expectations are now weakest in Auckland (2.0 percent, down 0.7 percentage point) and strongest in Wellington (3.8 percent, up 0.2 ppt). General inflation expectations remained in recent ranges at 3.5 percent.

"Despite the fall, one shouldn’t overstate the weakness in consumer sentiment. Households are still feeling pretty robust. Lower interest rates are likely behind the robustness in the proportion of people thinking it is a good time to buy a major household item. The tight labour market is another key support, though employment indicators have deteriorated markedly, so this is a vulnerability going forward," ANZ Research further commented in the report.