29 Mar 2019

Consumer confidence stable

1:09 pm on 29 March 2019

Consumer confidence is holding up despite growing concern about the economic outlook.

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The ANZ-Roy Morgan Consumer Confidence Index rose just one point in March to 122. Photo: 123RF

The ANZ-Roy Morgan Consumer Confidence Index rose just one point in March to 122 - which is about its historic average.

Consumers were a touch less optimistic about their current financial situation, but more upbeat about the longer term.

"Confidence has picked up from 2018 lows, but caution regarding the overall economic outlook appears to be preventing a break above average levels," ANZ chief economist Sharon Zollner said.

The consumer survey is in contrast to a business survey earlier this week with sentiment falling further to its lowest level in six months.

The Reserve Bank this week noted that soft domestic sentiment and activity was a factor in their surprise warning that the next policy move could be a cut in interest rates.

However, for the time being consumers are still positive about buying a big ticket item, even though they are less sure of the growth in house prices.

"A high proportion of people thinking it's a good time to buy a major household item suggests robust household spending despite weakness in Auckland house prices and slower housing market activity," Ms Zollner said.

Auckland consumer confidence hit its best level in a year, but weakened in Canterbury and much of the South Island.

Ms Zollner said putting the business and consumer surveys together pointed to annual economic growth of about 2.5 pct for the next two years with slower immigration gains and a cooling housing market weighing on activity.