Consumer confidence dips in November as economic outlook dims

New Zealand consumer confidence fell to a seven-month low in November as households grew less optimistic about the economy's fortunes.

The ANZ Roy Morgan consumer confidence index declined to 123.7 this month from 126.3 in October, falling for a second month while remaining at historically elevated levels. The current conditions index edged up 0.6 of a point to 124.6, while the future conditions measure dropped 4.6 points to 123.2.

Of the 1000 respondents, a net 18% saw good economic times in the coming 12 months, down from 25% in October, and a net 23% were upbeat over the coming five years, compared to 25% a month earlier. Both instances were increases in the number of pessimists rather than a decline in the level of optimists.

"Consumers appear to be looking through housing headwinds and the recent period of political uncertainty, seemingly happy to go with the flow, but with a cautious eye to the future," ANZ Bank New Zealand senior economist Philip Borkin said in a note. "The overall economic story still seems reasonable right now but it is fair to say it has become a little more nuanced."

New Zealand's economy has been buoyed by robust tourism, record migration, and a booming construction sector in recent years, However, uncertainty over the September election and formation of a new government raised concerns about what impact a new policy regime would have on areas such as housing, where prices have been soaring due to an undersupply of stock.

Today's survey shows a growing number of pessimists on the outlook for consumers' own financial state, with a net 15% saying they were better off now than they were a year ago, unchanged from October, but a net 29% predicting they'll be better placed in 12 months' time, down from 34%.

Respondents were still optimistic about buying big-ticket items, with a net 34% saying now was a good time to buy, unchanged from October, while paring back their annual expectations for consumer price inflation to an annual 3.1% over the coming two years, down from 3.5%.

They also reined in their expectations for the property market, predicting house price inflation of 1.5% over the next two years, down from 3% in October.

(BusinessDesk)