New Zealand’s ANZ consumer confidence drops in April, slightly above historical average

New Zealand’s ANZ consumer confidence index for the month of April dropped, albeit sitting slightly above its historical average. Also, both the current and future conditions indexes fell, the latter by more.

The ANZ-Roy Morgan Consumer Confidence Index fell 7.5 points from 128.0 to 120.5 in April. This is just above the average of the series since its inception in 2004. On a seasonally adjusted basis the story was similar: the index fell 8 points to 118.7.

A strong labour market, low interest rates and a steady housing market are supporting sentiment. Nonetheless, consumers appear to be feeling a little less bullet-proof, consistent with our view the saving rate will lift. Consumers appear to have mixed views at present.

The Current Conditions Index fell 5 points to 123.1 in April, while the Future Conditions Index fell 9 points to 118.7. The former is above average, the latter a touch below it, but both remain within the range prevailing over recent years.

Further, consumers’ perceptions of their current financial situation dipped 7 points to a net 9 percent feeling financially better off than a year ago. A net 25 percent of consumers expect to be better off financially this time next year, down 10 points. Further, a net 37 percent say it’s a good time to buy a major household item, down 2 points.

"Household inflation expectations are very volatile. But we’ll be watching next month’s outturn with great interest to gauge whether the April lift is just another short-lived spike or possibly the start of something more meaningful," ANZ Research commented in its latest report.

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