New Zealand consumer confidence rose in the first three months of the year, edging up after a fourth-quarter slump, though Kiwis have become less optimistic about the outlook for the next five years.
The Westpac McDermott Miller Consumer Confidence Index rose 1.1 points to 102.4 in the latest quarter, having tumbled to 101.3 in the fourth quarter, which was the lowest since 2009.
The present conditions index gained 2.3 points to 98.5, still below the level of 100 that separates pessimists from optimists. The expected conditions index rose to 105 from 104.7.
The confidence survey comes after figures showed New Zealanders spent less on their credit and debit cards in February, and the monthly ANZ-Roy Morgan Consumer Confidence survey, out last week, showed confidence eased in March. In the fourth quarter, retail sales recorded an unexpectedly strong gain of 2.2 percent, seasonally adjusted.
“While we’ve seen recent evidence of stronger retail spending, today’s weak confidence numbers give pause for thought on how far this upturn in spending has to run,” said Dominick Stephens, Westpac’s chief economist. “Households continue to be concerned about the near-term economic outlook and downbeat about their financial situation.”
The survey of 1,563 people was conducted between March 1 and March 11 and has a margin of error of 2.5 percent.
It shows that 20 percent of households say they are financially worse off that a year ago, unchanged from, December. On balance, 6.5 percent expect to be better off in a year’s time, up from 5 percent in the fourth quarter survey.
Looking at the broader economy, 19 percent of those polled expect bad times for the nation over the year ahead, an improvement on the fourth-quarter reading of a net 22 percent. Those optimistic about the economy over the next five years dropped to 27 percent from 31 percent, the lowest level since mid-2008.
On balance 17 percent of households said now is a good time to buy a major household item, up from 13 percent in December. See the interactive chart of both the ANZ and Westpac consumer confidence surveys below.
Services sector expands
Meanwhile, New Zealand’s services sector expanded last month, recording its highest February result since the BNZ-BusinessNZ Performance of Services Index survey began in 2007.
The index rose 1.7 points to 55.5 in February from January. A reading above 50 marks indicates expansion.
“The improvement in the PSI comes off the back of further upwards momentum in both activity/sales and new orders/business,” said Phil O’Reilly, chief executive at BusinessNZ. “When taking into account the January result, the first two months of 2012 have showed more life than we have experienced for some time.”
All of the five major sub indexes expanded, with new orders/businesses on 60.5. This was followed by a 4.3 point increase in activity/sales on 58.1.
Employment dipped to 51.8 from January but remained in expansionary mode, while supplier deliveries increased to 52.3 points. Stocks/inventories moved back into expansion on 51.2.
BNZ senior economist Craig Ebert said, like its sister survey, the Performance of Manufacturing Index, the results provide encouraging signs for the whole economy.
“February’s PSI provided fuel to the fire of last week’s PMI,” Ebert said. They point to more than just ongoing economic recovery but, in all probability, a quickening pace of it.”
Last week’s PMI rose 6.9 points to 57.7 in February from a month earlier, with four of the five of the sub-indexes expanding. The gain was led by the manufacturing sector, which showed its highest level of activity in almost two years, while metal production and machinery recorded its highest level on-record.
Service sector results were almost all in expansion in February. Wholesale trade rose to 60.1 in as did property & business services on 57.2 points. Health and community services also built on January’s results rising to 54.9.
Retail trade slipped to 54.0 points after recording two strong months of expansion.
The Northern region recovered from a dip in January on 55.3 along with Central on 58.8 points.
The Canterbury/Westland region was largely unchanged on 64.1, while Otago/Southland eased to 57.7 points. See the interactive chart here
(Updated with PSI figures)
(BusinessDesk)
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