Confidence rises, but still low
The ANZ-Roy Morgan consumer confidence index rose 4 points in August to 92.2, continuing a positive trend from July, but remains well below the 10-year average of 109.
“Consumers are feeling a little better, on the whole,” said Sharon Zollner (pictured above), ANZ chief economist.
Future outlook brighter, but present still gloomy
While the future conditions index rose 5 points to 100.5, reflecting more optimism about the year ahead, current conditions remain subdued at 79.7.
“This strong contrast... is typical of turning points in the economy,” Zollner said.
Inflation expectations and house prices show mixed signals
Inflation expectations ticked up slightly to 3.8%, while house price expectations increased from 2.4% to 2.8%, particularly in the South Island.
“Households’ inflation expectations are volatile, but the downward trend remains intact,” Zollner said.
Interest rate cuts and economic outlook influence confidence
The recent Reserve Bank rate cut has had mixed effects on consumer confidence, with mortgage holders feeling slightly more positive, while renters remain cautious.
“Interest rates are falling, but it’s because the economy... has been weaker than expected,” Zollner said.
Economic recovery hopes amid persistent challenges
Despite the current recession, Zollner expressed cautious optimism, suggesting that “the seeds of the recovery have now been sown,” though she acknowledged that consumer spending and housing market activity will be key indicators to watch as the economy evolves.
Access the ANZ-Roy Morgan report in full here.
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