27 Jul 2018

Expected minimum wage rise keeps consumer confidence steady

2:54 pm on 27 July 2018

Consumer confidence has edged lower but remains relatively buoyant because of expected wage growth.

The ANZ-Roy Morgan Consumer Confidence Index dropped two points to 118 this month compared with June, as winter slows down activity.

The survey found households across the country felt financially comfortable for the time being, especially in Wellington where consumer confidence rose eight points.

ANZ chief economist Sharon Zollner said a rise in the minimum wage contributed most to the slight lift in confidence, but that would come at a cost to businesses, hence their continued wariness.

"That's better news for consumers than it is for businesses that pay," Ms Zollner said.

Ms Zollner said the results would be good news for retailers if it translated into increased spending.

She said that might help to sweeten businesses' current sour outlook about the economy.

The survey showed consumers were a touch less confident about their personal longer term outlook. Consumers' optimism about the economic outlook for the next year eased to the lowest level since March.

"Consumers are showing a bit more caution about the overall economic cycle," Ms Zollner said.