June saw widespread gains in New Zealand’s consumer confidence and even though spending appetites have softened, households don’t seem worried about debt repayment, despite high levels of debt, according to Satish Ranchhod, Senior Economist at Westpac.
Key Quotes
“Winter typically sees a little bit of a dip in consumer confidence. But not this year. New Zealand households have shaken off their usual winter blues, with the Westpac McDermott Miller Consumer Confidence survey recording a 1.5 point rise in June. That took the index to 113.4 - its highest level since early 2015. And looking into the breakdown of this quarters survey, gains in confidence have been widespread, both geographically and by income levels.”
“June’s rise in consumer sentiment reflects improved confidence in the economic outlook. Increasing numbers of households expect economic conditions to improve over the coming year. Importantly, households expect that this will pass through to an improvement in their own financial position.”
“This improvement in confidence has come on the back of a couple of big developments in the economy. First, we’ve seen a strengthening outlook for export earnings in recent months, which is being reflected in gains in confidence in rural communities.”
“Second, this year’s Budget included planned adjustments to personal income tax thresholds and a family support package, both of which are scheduled to take effect from next year. If implemented, these changes and will give a boost to many households’ disposable incomes.”
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