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New Zealand consumer confidence falls in March, consumers cautious

Staff writer |
New Zealand consumer confidence dipped slightly in March, but remained near the historical average, according to the ANZ-Roy Morgan Consumer Confidence Index.

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The index slipped 1.7 points to 118 in March, in line with the historical average of 119. Future expectations fell 0.5 points to 116.2, below the long-term average while current expectations decreased 3 points to 120.8, ahead of the historical average of 115.

“Consumers continue to go about their daily business,” ANZ Bank New Zealand's chief economist Cameron Bagrie said.

"Net on net, consumers seem to think things are okay. We concur. The economy is hopping along at a reasonable pace. Importantly, it’s a speed that is more sustainable for longer-term prospects."

Bagrie noted the risks to New Zealand from improved oil prices, weak dairy and downbeat global sentiment, which he described as "about as upbeat as a coroner's retirement speech."

"Employment may be up, but wages are not moving by much," he said. "Low(er) interest rates are great for borrowers, but what about the savers, or those headed into retirement? Suddenly the nest-egg looks decidedly hollow."

Expectations for the economy over the year ahead fell 5 percentage points to a net 3 percent of respondents believing there would be good economic times, while expectations further out to five years ahead rose 2 percentage points to a net 17 percent optimistic.

Inflation expectations fell to an 11-month low of 2.9 percent, from 3.4 percent in January, which Bagrie said was likely pushed by low rates of current inflation.

A net 8 percent of respondents said they feel financially better off than a year ago, down 1 percentage point, while positive expectations 12 months ahead rose to a net 29 percent, from 27 percent last month.

Fewer consumers thought it was a good time to buy a major household item, with the reading dropping to a net 34 percent from January's 40 percent.

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