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December
2014
The Westpac : McDermott Miller NZ Consumer Confidence
Index for December 2014 is 114.8
WESTPAC : McDERMOTT MILLER
CONSUMER CONFIDENCE SURVEY
13 January 2015
“The
Westpac: McDermott Miller New Zealand Consumer Confidence Index (CCI) has
slipped a further 1.9 points to 114.8 in December Quarter 2014, from 116.7 in
the September Quarter,” announced John McDougall,
Director Forecasting in Strategy Planning and Economics Consultancy, McDermott
Miller, “this continues a gradual slide from the peak of 121.7 recorded in
March 2014.” “But the significance of
the decline should not be overstated”, said McDougall. “Consumers remain firmly
optimistic and this is the tenth quarter in a row New Zealand consumers have been
so” he observed.
“Consumer
Confidence amongst those employed in the Private Sector slid in the December
Quarter, down 4 points to 118.6 from 122.6 in September”, reported John McDougall. “However their Consumer Confidence
remains higher than their counterparts employed in the Public Sector, whose
December CCI of 114.2 is little changed from September.”
“This
quarter, the largest movement among the five component questions of the CCI is
an increase in the net percentage of consumers who feel they are now worse off
than they were a year ago (up to a net 3.1% in December from 0.2% in
September).”, John McDougall said.
”This was accompanied by a decline in the net percentage of consumers expecting
to be better off in a year’s time (down from 10.2% in September to 7.8% in
December), and a dip in the net percentage expecting good economic times in New
Zealand over the next year to 16.5% in December, down 1.8 points from
September.”
“When we looked at why consumers feel they are
worse off than they were a year ago, the most frequent reason given is that
living costs are rising faster than income (47%)”, John
McDougall explained.
“Among those that expect to be better off in a years time, the most
frequently given reason is an expected rise in salary or wages (24%), followed
by expected improvement in financial commitments (18%).”
“This continues
to be the main reason for expecting good economic times over the next year in New Zealand
“Belief in the effectiveness of government economic policy (32%). Interestingly, those expecting bad economic
times in the coming year, tend to ascribe it to Government policy (29%).
“Significantly,
over the September and December quarters there was near doubling (to 23%) of
those expecting bad economic times because of a poor outlook for farming.
Concern about the fall in dairy payout likely underlies this”, conjectured John McDougall.
“Indeed, a poor outlook for
farming is the most cited reason among Private Sector employees for expecting
bad economic times over the next year - 32% give this reason compared to only 15% of Public Sector
employees”.
“The national Consumer Confidence Index
remains strongly optimistic at 114.8, and points to healthy spending by
consumers on Christmas and New Year season goods, holidays and leisure
activities”, concluded John McDougall
“If this is accompanied by continued growth in consumer spending on large
ticket household items, retailers can expect consumer spending to remain strong
through the early New Year”.
Regional Consumer Confidence
“Metropolitan consumers continue to be more optimistic
than rural and secondary centre consumers” announced John
McDougall, Director Forecasting in Strategy Planning and
Economics Consultancy, McDermott Miller. Their confidence rose against the
national trend by 0.8 points, to 119.2 in the December quarter. In contrast, Secondary Centre consumer
confidence fell by 4.3 points to 110.2, and the confidence of Rural Consumers
by even more, down 5.6 points to 108.8. There is now a dichotomy in consumer
confidence, between Metropolitan consumers on the one hand, who can still be
described as strongly optimistic, and on the other hand secondary centre and
rural consumers who could be described as cautiously optimistic”.
“Wellington
consumers are the most optimistic of any region in New Zealand, with an Index of
120.0. They have the highest net percentage who expect to be personally better
off in a year’s time – 14%, up from 10% in September. A high 43% of Wellington respondents
cite a salary/wage rise as the reason for this expectation. The net 30% of Wellington consumers who
see the present as a good time to buy major households is up 9 points since
September, primarily because there are good sales on.”
“Canterbury
consumers also are strongly optimistic,
with an index of 119.9, up 4.0 points since September. A net 6% feel they are
now personally better off than they were a year ago, the highest such response
of all consumers. Some 31% of those say it is because of an improvement in
their financial commitments, followed by 28% who say it is because of a
salary/wage rise. Also contributing to
Cantabrians’ optimism is the net 32% who think the present is a good time to
buy major household items, again the highest in the country (some 58% say this
is because of competition or good sales on) ”.
“Auckland
consumers are not far behind in their optimism, with an index of 118.4, down
from 120.2 in September. They are the
most bullish about New Zealand’s short-term economic prospects, with some 28%
expecting good times over the next year (up 1.8 points from September), largely
because of effective government policies (by 26%).
“Bay
of Plenty region consumers are the most confident among
provincial regions, with a December index of 116.6 (down 7.2 points from
September). Of all regions’ consumers, they have the highest expectations of
New Zealand’s long term economic prospects, with a net 39% expecting good times
over the next 5 years (down slightly from 41% in September)”.
Consumers in Southland (index 104.4) and Otago (105.0)
regions are the least optimistic in the country. A net 8% of Southland consumers expect to be
personally worse off in a years time, the gloomiest expectation in the
country. Otago consumers have the lowest
expectation of New Zealand’s
short term economic prospects, with a net 8.9% expecting bad economic times
over the next year. Some 33% of Otago consumers say this is because of poor
outlook for farming, especially dairy”.
“The poor outlook for farming is cited by many provincial
consumers as the reason for expecting bad economic times in New Zealand over the next year; some 46% of
Waikato consumers give this reason, as do 38% of Southland, 30% of
Taranaki/Manawatu/Wanganui and 29% of Canterbury
consumers. In contrast, only 16% of
Auckland consumers and 8% of Wellington consumers who expect bad economic times
the coming year give farming prospects as the reason. This suggests many metropolitan (other the
Christchurch) consumers are largely oblivious to the most significant short
term threat to New Zealand’s economic prosperity – low dairy prices”, John McDougall concluded.
[ENDS ]
13
January 2015
John McDougall
Director Forecasting
McDermott Miller
04 471 8502
0204 027 6688
Email: strategies@mcdermottmiller.co.nz
Website:
http://www.mcdermottmiller.co.nz/
Index Background
The
Consumer Confidence Index is based on a survey of a representative sample of
1557 New Zealand
households interviewed during 1-11 December 2014. It analyses answers to five standard
questions on personal financial circumstances, expectations for the economy and
attitude to buying substantial household items.
Index scores measure consumer confidence in the economy, with a score of
greater than 100 showing more optimism than pessimism and vice versa for a
score below 100 (for more information
see Survey Specifications).
Acknowledgement
The Westpac : McDermott Miller Consumer Confidence
Survey and Index is owned by McDermott Miller Limited. Westpac : McDermott
Miller should be acknowledged as the source when citing the Index, just as
Westpac-Melbourne Institute should be acknowledged when citing the Australian
Index of Consumer Sentiment. Graphs supplied may be reproduced by the news
media provided the Westpac : McDermott Miller logo remains inset.
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