Consumer sentiment still had a spring in its step for July according to the ANZ Bank’s chief economist Cameron Bagrie.
“The Budget put $2 billion on the table for families, and pork barrel politics is rampant as the election looms,” says Bagrie.
The ANZ-Roy Morgan consumer confidence index eased from 127.8 points to 125.4; that’s still the second-highest result in the past five months.
According to the index, consumers’ are more upbeat in New Zealand than Australia. The same survey in Australia has consumer confidence at 113.0 points compared to 125.4 here.
“Once we adjust for the seasonality, as the cooler months often bring the same for sentiment, the index rose one point to its highest level since September 2014,” says Bagrie.
“Consumers have a lot to smile about,” he says.
“The labour market is strong; the unemployment rate is low (and falling), and we are detecting more anecdotes of rising wage pressures – something that has apparently been missing for some years,” says Bagrie.
“Petrol prices have plunged, and competitive pricing pressures in the retail sector remain,” he says.
“A slowdown in the property market, notably in Auckland, is proving to be no Achilles heel. Consumer confidence in Auckland remains elevated,” says Bagrie.
The consumers’ view of their financial position tip-toed from +14 to +10.
The views regarding their financial situation in 12 months’ time are slightly changed at +32 points (+33 previously).
A net 39% of consumers believe it’s the right time to buy a major household item. That’s down from 45% in June but still high.
Inflation expectations dipped to 3.4%. Although that is the third consecutive monthly fall, they continue to jump around in what is now quite a common range.
National house price expectations eased from 4.0% to 3.7% in July, the lowest since August 2014.
Expectations in Auckland fell to 3.1%, the lowest since November 2011.
