NZ Westpac consumer confidence falls on dwindling economic outlook

New Zealand’s Westpac consumer confidence during the second quarter fell as households became increasingly impatient and worried over the dwindling global economic outlook. Further, concerns over the Brexit referendum have poised deeper worries among consumers.

The Westpac-McDermott Miller consumer confidence index fell to 106.0 in the June quarter from 109.6 in the previous quarter, remaining well above the 100-mark point, where a reading above 100 indicates more optimists than pessimists, data released showed Monday.

The survey follows government figures last week showing gross domestic product expanded 0.7 percent in the March quarter, beating estimates, although that was underpinned by population growth with the economy increasing just 0.1 percent on a per capita basis.

A net 1.3 percent of the 1,555 people surveyed expect the economic outlook to deteriorate over the coming year, compared to a net 1.4 percent seeing an improvement in the March quarter, while a net 7.2 percent see better times over a five-year horizon, down from 17 percent three months earlier.

"Households, particularly those on middle incomes, have become increasingly worried about where the economy is heading over the next few years," said Satish Ranchhod, Sebior Economist, Westpac Banking Corp.

Further, the survey showed that consumers remained resilient on their current financial condition with a net 1.3 percent saying it was worse than a year earlier, compared to 3.2 percent in March, while 4 percent expect their situation to improve over the coming year, down from 6.5 percent.

However, a net 21.4 percent said now was a good time to buy, down from 26.7 percent in March, and below the long-run average of 26.5 percent. Ranchhod, meanwhile, cited low interest rates as the major cause for the reluctance in consumer spending.