Consumer confidence sunk to a fresh record low for the second month in a row in March, according to the ANZ-Roy Morgan Consumer Confidence Survey.
Of the 1000 people interviewed for the survey, 47% thought they were worse off financially than they were at this time last year compared to just 23% who thought they were better off.
They were a bit more evenly divided on their outlook for the next 12 months, with 30% saying they thought they would be better off in a year's time and 39% believing they would be worse off.
When asked if they expected to experience good or bad times financially over the next 12 months, or a mix of both, 56% said they were expecting bad times and just 11% were expecting good times.
All of those figures have shown a steady decline in the number of people who are optimistic about their financial prospects, and a steady increase in those who are pessimistic.
Additionally, 51% of respondents in the latest survey thought it was a bad time to buy a major household item, almost double the 26% who thought it was a good time to buy.
When asked what they thought would happen to house prices over the next two years, 48% said they thought they would go up, down from 75% in October, while 23% thought prices would decline, up from 7% in October.
"Households are facing something of a perfect storm," ANZ Chief Economist Sharon Zollner said.
"Omicron is causing disruption and probably a degree of alarm, but the subdued level of forward looking indicators highlights that there is a lot more going on than that.
"Indebted consumers may not like higher interest rates but all consumers hate inflation, the thief in the night that eats away purchasing power and makes households feel that they are going backwards, even with a strong labour market.
"The question of whether it is a good time to buy a major household item does not bode well for retailers. - it's well below the troughs of the 2008/09 recession.
"Confidence is significantly lower than in Australia, where both inflation and interest rates are lower, and Omicron more recent," she said.
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You can compare these consumer confidence survey results with the less pessimistic business confidence survey, here.
25 Comments
Who cares about consumer sentiment when the average kiwi home is worth $1,000,000!
(but I also think that if house prices do start crashing, there is serious possibility of massive credit contraction and potentially a very severe recession or even depression.....more QE to avoid deflation and debt default may only make the situation worse by flooding markets with more $$ which could result in even more inflation and financial/social instability - see the periods of history where money printing is the last resort to save an economy/failing monetary system....a bit doom globin (lol) but its certainly a possibility given the debt burden we have....and look where consumer sentiment is now...below GFC levels and we haven't even entered recession/credit contraction yet!)
Blimey this article reads like a precursor to the the Dark Ages and it’s not going to be getting cheaper to light up a light bulb either. Winter of discontent. Popular media use of Shakespeare. Should be hearing it in ladles soon enough. This used to be kind government has challenges aplenty and looking something like a bunch of landlubbers on a yacht, aback on a sloppy sea.
... an increasing number of homeless people will spend a cold winter in their discount tent ... or , in a motel room at taxpayers expense ... the high price of being " kind " to those wealthy folks in their $ million houses ... no capital gains tax , no land tax ... a free ride for the rich ... another wasted 5 years of a dysfunctional government ....
Check out this other chart that Sharon Zollner just posted on twitter...
And remember that capitalism and credit contracts are based upon confidence and faith that the future is going to be better than the present.
When this many people think the future is going to be worse than the present, how do you put faith and confidence in all the debt/credit contracts we have holding this very fragile system together?
no they pin it on russia/Ukraine
Haha - left leaning governments do...of course.
When asked what they thought would happen to house prices over the next two years, 48% said they thought they would go up, down from 75% in October, while 23% thought prices would decline, up from 7% in October.
so 48% thought house prices would go up vs 23% thought the opposite way. How about their consumer confidence?
Of the 1000 people interviewed for the survey, 47% thought they were worse off financially than they were at this time last year compared to just 23% who thought they were better off.
so 47% worse off vs 23% better off financially...
Remember these are all from the 1000 people interviewed for the survey.
Strange, Government said that house prices go up would create "wealth effect". So people would feel more confidence financially. If 48% people still think house price would go up, then within the same group, why 47% people think they were worse off financially? Shouldn't be these 47% think they were better off if "wealth effect" really work for the economy?
Maybe the penny has finally dropped and people have finally worked out that unrealized capital gains combined with massive personal debt does not equal wealth. Unrealized capital gains won't put fuel in the car or food on the table and shock/horror.......the cost of servicing debt can actually go up and does in fact need to be paid back.
The analogy of kicking the can down the road has been used for a long time now, but I feel we have finally run out of road.
Stop spending, no eat outs, no shopping. Just work, cook at home and watch tv.
So... lockdown again.
Lol - that would create the conditions for a depression in the wider economy.
Stop buying over priced crap you don't need, pay down debt, if you cant afford it don't buy it, don't concern yourself with what everyone else is doing (i.e. FOMO), shop around for the best deals, always negotiate prices, save and invest wisely, live modestly and be happy......real simple.
And then do what? Invest in workforce training, education & welfare reforms, infrastructure and innovative industries?
Not quite, the forever solution from National-Labour is to double-down on the very mindless stimuli that brought us here.
So basically live like monks, have a joyless life, burn yourself out and watch the ones who caused the problems dine out and live the Life of Riley while they keep insisting it's just a question of hard work for all the rest of us, whomst actually used to be able to afford the basics on a middle class salary?
I'm starting to get a real good handle on where the French were coming from with the whole Les Mis thing.
And if you complain about these unjust circumstances....the people who are sitting pretty call those who can see through it doom goblins (lol)
Or that you've failed to appropriate take personal responsibility (haha).
Right, a life of simplicity is now "joyless". Maybe that's the root of our problem?
I agree…however our debt ponzi is now reliant on people continuing to consume at ever expanding rates…if we don’t, the economy shrinks, businesses close, and there will be defaults on debt.. bad thing? Perhaps..but as you say, perhaps not.
.
Stuffs only worth what people can pay. Which is less and less everyday. Discretionary spending will take a gun shot to the head this year. But hay...lets ram in the maximum rent increases because were providing housing for the good of society...
Lets take a relatively tiny sample of 1000 people (out of 5 million) and add in an economist....and voila!...
No insights into reality
My Top 6 For Today
Reason1: Lousy Labour leadership. It's becoming harder to ignore now. The team of 5 million is set to become two separate nations sharing the same islands. Which dummy thought of that?
Reason 2: Too many broken relationships. Therefore too many single people households. Not very clever socially & not very economic either.
Reason 3: Too many unrealistic expectations. Too many dreamers & not enough workers. And far too much welfare for the 16-65 year olds.
Reason 4: A poor comprehension of reality from 50 years of sub-par education. Look at the Labour Party today. They are living proof that the millennials (& more) have been denied a great education. And they think they're the smart people in the room. Oh, pa-lease.
Reason 5: Too fat & too lazy. There are more of these people than we care to admit. It is an effect of third & fourth generation wealth & of third & fourth generation welfare. And the shrinking middle classes. West-wide.
Reason 6: Greed. Wall Street sold out its own people for greater profits. Yes, I know, the workers had priced themselves out of the market.... but still. Okay, double-greed then. Happy?
Well said but the but the Govt she is not a listening Nothing too see here
... 5 years of mismanagement by both the government and the reserve bank have led us to the edge of the economic cliff .... a split , a chasm has opened between the landed gentry in their $ million homes , and those without ... a nation split by property ownership , and by race ...
" Jacindamania " is starting to wear off .... frankly , a lot of us are fed up to the back teeth with her experiment for a kinder , greener socialist state ...
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