NZ consumer confidence rebounds as inflation expectations reset lower
The rebound confirms fuel prices, rather than a broader loss of confidence, were the key driver of the March slump, with the sharp and symmetric reversal in inflation expectations likely to reinforce the RBNZ’s comfort that the price shock is not embedding itself into household psychology. The pickup corroborates other recent signals, including a bounce in card spending on discretionary goods and the June Business Outlook survey, pointing to a broader, if still partial, recovery in household sentiment. Regional divergence, with Auckland surging ahead while Wellington lags, points to uneven momentum feeding into retail and housing-related data in the months ahead.
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NZ consumer confidence lifted 4 points to 91.3 in June, per ANZ-Roy Morgan, with two-year inflation expectations easing sharply from 5.3% to 4.6%, back to pre-oil-spike levels. The index remains 16 points below its January peak, with Auckland leading a regional rebound.
Summary:
- ANZ-Roy Morgan Consumer Confidence lifted 4 points in June to 91.3, back to its March level but still 16 points below its January peak
- Two-year-ahead inflation expectations eased sharply from 5.3% to 4.6%, returning to where they sat in January before the oil price spike
- The net proportion of households saying it’s a good time to buy a major household item rose 9 points to -11, consistent with recovering retail sales
- The future conditions index rose from 92.7 to 96.7, while the current conditions index lifted 6 points to 83.2
- Perceptions of the economic outlook over the next 12 months improved from -36% to -23%, the strongest reading since February
- House price inflation expectations eased slightly from 2.6% to 2.5%, ranging from 1.4% in Wellington to 3.9% in the North Island outside Auckland and Wellington
- Auckland posted the biggest regional bounce, up 10 points, opening a clear lead over Wellington, which continues to trail the other regions
New Zealand consumer confidence rebounded in June, with the ANZ-Roy Morgan Consumer Confidence index lifting 4 points to 91.3, returning to where it stood in March but leaving it still 16 points below its January peak. The improvement was driven in large part by a sharp reversal in inflation expectations, with households’ two-year-ahead inflation outlook easing from 5.3% to 4.6%, a move ANZ Research described as a remarkably symmetric drop back to the levels seen between December and February, before the earlier oil price spike hit sentiment.
The net proportion of households saying it is a good time to buy a major household item rose 9 points to -11, an improvement consistent with recovering retail sales. Forward-looking sentiment also strengthened, with the future conditions index climbing from 92.7 to 96.7 and the current conditions index up 6 points to 83.2. Perceptions of the economic outlook over the next 12 months improved from -36% to -23%, the strongest reading since February, while the five-year-ahead outlook edged up to +3%.
House price inflation expectations eased slightly to 2.5% from 2.6%, though the national figure masked wide regional variation, ranging from 1.4% in Wellington to 3.9% in the North Island outside Auckland and Wellington. ANZ Research said the bounce should surprise no one given the outsized role higher fuel prices played in driving the earlier slump, noting confidence has now regained almost half its fall from the highs, with both the current and forward-looking sub-indices sitting 11 points off their lows.
The pickup follows a broader pattern of improving data, with May bringing a lift in consumer confidence alongside a bounce-back in ANZ card spending on discretionary goods and services, corroborated by stronger retailer-reported activity in the June Business Outlook survey. Regionally, Auckland recorded the largest improvement, up 10 points, opening a clear lead, while Wellington continued to trail the other regions in the survey.
This article was written by Eamonn Sheridan at investinglive.com.