New Zealand consumer confidence fell in the fourth quarter, particularly in rural and provincial areas as prospects for a low dairy payout take their toll despite falling petrol prices and lower mortgage rates.
The Westpac McDermott Miller Consumer Confidence Index fell to 114.8 in the December quarter, from 116.7 three months earlier, its lowest level in over a year and a gradual slide from the peak of 121.7 recorded in March. A reading above 100 indicates more optimists than pessimists.
There has been a mixed bag in economic developments over the past three months with Fonterra Cooperative Group slashing its dairy payout forecast against a background of poor economic news offshore but consumers' purchasing power has been boosted by plunging oil prices and falling mortgage rates. With capital gains tax off the table for the foreseeable future, the housing market has also started showing fresh signs of life.
"For the time being, falling petrol prices and lower mortgage rates appear not to have registered as a positive in consumers' minds," said Westpac chief economist Dominick Stephens. "Even in the main cities consumer confidence remained steady, rather than rising."
But the significance of the decline shouldn't over over-stated as New Zealand consumers remain firmly optimistic for the tenth quarter in a row, Westpac said.
The present conditions index fell to 111.4 from 113 three months earlier and the expected conditions index fell to 117.2 from 119.3. Consumers' attitude to their current financial situation weakened to -3.1 from -.01 and for their expected financial situation from 10.2 to 7.9.
Those deeming it a good time to buy a major household item fell to 25.8 percent from 26.1 percent, a little below the historical average. The one-year economic outlook also dropped to 16.5 from 18.3, while the five-year outlook recorded a similar decline to 27.2 from 29.3.
(BusinessDesk)
Fiona Rotherham
Mon, 22 Dec 2014
Mon, 22 Dec 2014
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NZ consumer confidence dips on back of reduced forecast dairy payout
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