Consumer confidence in New Zealand lifted by 0.4 points to 100.2 in December following an 8.6 point jump in November, according to new data from ANZ and Roy Morgan.
The lift up was driven by a surge in the proportion of households thinking it’s a good time to buy a major household item.
It also comes as inflation expectations eased back 0.2 percentage points to 3.8 per cent, where they’ve spent four of the past five months.
According to ANZ and Roy Morgan, the future conditions index made up of forward-looking questions eased from 107.9 to 105.4 in December. The current conditions index lifted 5 points to 92.5.
The net perceptions of current personal financial situations fell 2 points to negative 14 per cent in December with 26 per cent (up 1 ppt) of New Zealanders saying they are 'better off financially' than this time last year compared to 40 per cent (up 3ppts) who say they are 'worse off financially'. Although there was a fall, it was off the back of a sharp rise the previous month.
A net 21 per cent of New Zealanders now expect to be better off this time next year including 44 per cent (up 1 ppt) who expect to be 'better off financially' this time next year compared to 23 per cent (up 2 ppts) who expect to be 'worse off financially', a net move overall down 1 point.
A net 1 per cent of New Zealanders now think it’s a bad time to buy a major household item with 40 per cent (down 4 ppts) saying it's a 'bad time to buy a major household item', compared to 38 per cent (up 7 ppts) who say it's a 'good time to buy a major household item'. The latter is a net positive movement of 12 points for this indicator and on the verge of cracking net positivity.
The net perceptions regarding the economic outlook in 12 months’ time fell 4 points to negative 12 per cent in December and the 5-year-ahead measure eased 2 points to positive 7 per cent.
Meanwhile, house price inflation expectations rose from 3.7 per cent to 3.9 per cent year-on-year in December.
Two-year-ahead CPI inflation expectations dipped from 4.0 per cent to 3.8 per cent, reversing last month’s lift. Household inflation expectations typically bounced around in a 3-4% range in the years before COVID.
“ANZ-Roy Morgan New Zealand Consumer Confidence was steady overall in December, though with some interesting movements in the components,” ANZ and Roy Morgan reported.
“Households on net still feel negative about their current financial situations, but there’s been a sharp improvement in the net proportion who think it’s a good time to buy a major household item.”
Most of the growth in the time to buy a major household item indicator has been driven by respondents who have mortgages, as interest rates have fallen in New Zealand over the last year. As of November 27, 2024, New Zealand's official cash rate (OCR) is 4.25 per cent. This is the lowest level it has been since November 2022.