New Zealand consumer confidence dips in Q1
Despite the drop, the indicator remains comfortably above the 100-threshold that separates optimists from pessimists.
According to the survey, the fourth quarter decrease reflected consumers’ more pessimistic attitude in most sub-indicators of the index compared to Q3. Respondents were more pessimistic of the one-year economic outlook.
The drop may have been caused by growing anxiety over September’s general elections, housing affordability and external political developments.
Consumers were also less upbeat on their current financial situation and expected financial situation. In contrast, the five-year economic outlook was the only sub-indicator that was perceived more favorably by consumers.
Despite March’s decline, Westpac pointed out that, “while households may be a little less optimistic, they’re certainly not pessimistic. On top of this, the proportion of households reporting that they are in better shape financially than they were last year is higher than average.”
Growth in private consumption will be supported by strong data from the labor market and strong levels of consumer confidence.
FocusEconomics panelists expect that private consumption will increase 3.5% in 2017, which is up 0.1 percentage points from the previous month’s projection. For 2018, analysts also expect private consumption to expand 2.7%. ■