NZ: Consumer sentiment rose solidly in January to its highest since April 2015 - ANZ

Cameron Bagrie, Chief Economist at ANZ, notes that the NZ’s ANZ-Roy Morgan Consumer Confidence Index rose from 124.5 to 128.7 in January – its highest level since April 2015.

Key Quotes

“To be fair, gains at this time of year are common, with households enjoying that holiday feeling. In seasonally adjusted terms, the lift was more modest, with the index rising 0.3 points to 124.3.”

“The Current Conditions and Future Conditions Indexes stormed ahead by 5 and 4 points respectively (although again, seasonally adjusted moves were more modest, while still positive). At 129.8 and 128.1 respectively, the levels for both indexes remain historically high. In terms of the details:

• December quarter spending numbers may have been a bit of a damp squib, but indicators for concurrent spending remain sunny. A net 11% feel better off financially compared with a year ago; this indicator has been pretty steady for the last six months. Consumer enthusiasm for buying major household items jumped from +38 to +49, the highest since April 2015. 
• Forward-looking indicators have a tail wind. Net optimism towards the economy in 1 and 5 years’ time both lifted to a net 25% (up 3 and 7 respectively). Respondents’ views towards their own financial situation in 12 months’ time lifted to a net 34% (up 2).
• All regions are looking pretty bright. The South Island ex-Christchurch is the most optimistic about current conditions, while Wellington has the highest reading on future conditions.”

“Inflation expectations lifted from 3.4% to 3.7%. That’s not far off the average seen over the prior 12 months, but expectations have been steadily rising since October.”