NZ: Consumer confidence has picked up - Westpac

Satish Ranchhod, Senior Economist at Westpac, notes that the NZ’s consumer confidence has picked up, but it remains a little below average levels.

Key Quotes 

“Households on middle to high incomes are feeling more upbeat. However, those on lower incomes remain concerned about the economic outlook.

The Westpac McDermott Miller Consumer Confidence Index rose to 108 in September. That’s up 2 points on the June reading, though still a little bit below average levels. This pick-up in consumer confidence comes on the back of firm economic activity through mid-2016, with the latest GDP figures showing that the economy expanded by a solid 3.6% over the past year. And it’s looking like the economy will keep trucking along for the next year or so, with a range of economic indicators pointing towards continued momentum in activity.

The strengthening in economic conditions has been rippling through the household sector. Employment is up, with business surveys showing a 2.8% increase the number of full-time equivalent employees over the past year. Conditions in the housing and construction sectors are very strong. And households have been in the mood to spend, with retail sales up 5.5% over the past year. It’s true that much of the recent strength in retail spending has been due to increases in the population. However, after weakness in earlier quarters, we’ve seen per capita spending also picking up again in recent months.

While economic conditions are looking good for now, there’s still an air of nervousness about the economy’s trajectory. Despite picking up, the number of households expecting favourable economic conditions in five years’ time remains at some of the lowest levels we’ve seen in decades, with those in rural areas especially downbeat.”