19 Sep 2018

Consumer confidence at 'concerning' 6-year low

3:08 pm on 19 September 2018

Consumer confidence has hit a 6-year low as growth in house prices slows and fuel prices rise, new figures show.

Open home sign at a house for sale in East Auckland

Consumer confidence in Auckland was particularly downbeat because of the slowing housing market. Photo: RNZ / Claire Eastham-Farrelly

The Westpac McDermott Miller consumer confidence index fell five points in the current quarter to 103.5.

Westpac senior economist Michael Gordon said Auckland was particularly downbeat because of the slowing housing market and the new regional fuel tax.

"Housing is really quite an important component of wealth for New Zealanders, and when house prices are rising rapidly you tend to see people spending a bit more freely out of their perceived wealth," he said.

"Property owners are just not getting that accumulation of wealth that they were in the past."

Mr Gordon said the fall in sentiment was a concern because consumer confidence was a broader, more sound measure of feeling about the economy.

"This is not a dissatisfaction with who is in power, it does seem to be a more genuine read of how people are feeling about how the economy is tracking."

Mr Gordon said low consumer confidence would be of most concern to retail businesses because it indicated consumers would spend less.

It appeared that the boost from the Government's recently introduced families package was yet to show through.

He said gloomy commentary from business leaders may also be a factor in the lower consumer confidence.