20 Mar 2017

Consumer confidence edges back

1:17 pm on 20 March 2017

Consumer confidence has edged back but households remain upbeat about the economy and their financial position.

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Photo: 123RF

The Westpac McDermott Miller Consumer Confidence Index declined 1.2 points to 111.9 in the three months to March from the previous quarter, and is slightly above the average level of 111.4.

A reading over 100 means optimists outnumber pessimists.

"Confidence in the household sector remains at healthy levels," Westpac Acting Chief Economist Michael Gordon said.

"Combined with strong population growth, this is supporting continued increases in spending."

Respondents are a little less optimistic about the economy over the next year, down 6.2 points to 11.8.

Westpac said that may reflect the high cost of housing for younger and low income people, some jitters about the forthcoming election, and recent political developments overseas.

"But while households may be a little less optimistic, they're certainly not pessimistic. On top of this, the proportion of households reporting that they are in better shape financially than they were last year remains higher than average," Mr Gordon said.

The number of respondents saying it was a good time to buy a major item edged down to 20.1 from 20.2.

The survey also indicated spending patterns have changed, which Mr Gordon said may be due to the cooling housing market in recent months.

"Households are continuing to increase their spending on leisure activities, like dining out. However, they're a little more reluctant to spend on durable items, like home furnishings."

The survey, which has been in positive territory since March 2011, was conducted over 1-11 March, with a sample size of 1555.

The survey's margin of error was 2.5 percent.

On Friday the monthly ANZ-Roy Morgan consumer confidence index showed a similar trend, easing back slightly from robust levels.

Separately, activity in the services sector fell for the first time in five months.

The BNZ-Business New Zealand Performance of Services Index edged 0.7 points lower in February on the month before to 58.8.

A reading over 50 indicates expansion.

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