NZ consumer confidence plummets

Tamaki Makaurau - A new survey shows consumer confidence plummeted to a record low in February, as respondents nervously eyed up widespread covid in the community for the first time.

The ANZ-Roy Morgan consumer confidence index found perceptions of current personal financial situations fell 14 points to minus 18 percent.

A net two percent of those surveyed expect to be worse off this time next year, down 12 points which is the first time it has ever been in the red.

Households think it’s a terrible time to buy a major household item (down 17 points). This is the best retail spending indicator in the survey.

Perceptions regarding the next year’s economic outlook fell 21 points to minus 42 percent, not as low as when covid first reached New Zealand. The five-year outlook fell 11 points to minus eight percent.

House price inflation expectations eased from unchanged in Auckland to lower everywhere else.

Omicron is the big news this month, and it seems to have had an enormous impact across the whole survey, ANZ chief economist Sharon Zollner says.

Interestingly, the omicron impact had a much smaller effect on consumer confidence in Australia, but it possibly came as less of a shock there, insofar as the delta outbreak was more significant in Australia.

In contrast, this is the first time most New Zealanders have faced a significant chance of actually catching covid.

This month’s data looks grim, but there are undoubtedly some temporary impacts in there. Time will tell what the other side looks like, but New Zealanders know that omicron is fast and furious and will blow through relatively quickly.

There’s a lot of pressure on households, for sure: the rising cost of living, rising interest rates, the cooling housing market, and tighter credit availability. But these things aren’t new.

The omicron impact had a much smaller effect on consumer confidence in Australia, but it possibly came as less of a shock there, insofar as the delta outbreak was more significant in Australia.