Household saving increases following nationwide lockdown

Te Whanganui-a-Tara - New Zealand households saved more than $3.8 billion this quarter, driven by a 6.3 percent drop in household spending, Stats NZ says.

The fall in household spending reflects the impact of higher covid alert level restrictions in place during the September 2021 quarter.

In quarters where New Zealand has been in alert level four lockdown we have seen large falls in household spending, as parts of the economy have been unable to operate as usual.

Despite the drop, household spending was $6.4 billion higher than during the June 2020 quarter which included about four weeks of the first nationwide level 4 lockdown.

Household saving increases following nationwide lockdown, Stats NZ said today.

Households spent about $3 billion less this quarter compared to the March and June 2021 quarters. Spending dropped particularly on services and durable items, including restaurant meals, accommodation, clothing, motor vehicles, and furniture during the September 2021 quarter.

Lower spending led to an increase in the ratio of household saving to net disposable income, to 7.5 percent in the September 2021 quarter, up from 1.0 percent in the June 2021 quarter.

Total income received by households fell by 0.3 percent, driven by a $245 million decrease in income received by self-employed business owners.

Household compensation of employees grew $429 million, reaching $38.6 billion this quarter. This rise in compensation of employees reflects the increase in employment and wage rates observed in Labour market statistics: September 2021 quart

Meanwhile, Aotearoa household net worth grew by $60.7 billion in the September 2021 quarter compared with the June 2021 quarter.

This represents an increase of 2.5 percent, a similar result to the June 2021 quarter, which was up $60.6 billion or 2.6 percent.

While household net worth continues to grow, the pace has slowed since the March 2021 quarter, which recorded an increase of $207 billion or 9.6 percent.

Net worth is the value of all assets owned by households less the value of all their liabilities.

The growth in net worth for the September 2021 quarter was driven by increases in both non-financial assets and financial assets, up $65.4 billion from the previous quarter.

Growth in property values have slowed over the past few quarters; in comparison, stronger rises in property were the main contributor to the $95.3 billion or 9.1 percent increase in non-financial assets in the March 2021 quarter. Non-financial assets include owner-occupied properties only.