NZ: Consumer confidence has retraced its post-election drop - Westpac

New Zealand’s consumer confidence has retraced its post-election drop, and is back around average levels as spending appetites have increased, but households still don’t seem focused on paying down debt, according to Satish Ranchhod, Senior Economist at Westpac.

Key Quotes

“Households perked up at the start of 2018. The Westpac McDermott Miller Consumer Confidence Index rose 3.8 points in March, taking it to a level of 111.2. That reversed most of the drop seen in the wake of last year’s election and takes consumer confidence back to around average levels.”

“It’s not unusual to see a bit of nervousness around major events like elections, or for the related wobbles in confidence to fade after a few months. But political developments aren’t the only thing affecting confidence right now. The past few months have also seen mortgage rates pushing down and a related second wind in the housing market. We’ve also continued to see positive conditions in some key sectors of the economy, like the hospitality sector.”

“Looking into the detail of what’s behind the lift in consumer confidence, households are feeling more optimistic about the outlook for their own financial situation over the coming year. They have also become more upbeat about the economy’s longer-term trajectory more generally.”

“The lift confidence was widespread across geographic regions and household groups.”