Third Quarter Consumer Confidence Lifts in New Zealand

Third Quarter Consumer Confidence Lifts in New Zealand

• Consumer confidence index reached 101 in Q3 2016
• All three drivers of sentiment increased (job prospects, personal finances and good time to buy things)
• Rural consumers mood improved, diary and horticulture being the most optimistic

2 NOVEMBER 2016: The New Zealand consumer confidence index reached 101 in Q3 2016 – the highest score since Q1 2015, according to findings from Nielsen, a leading global provider of information and insights into what consumers watch and buy. The index represents a five point increase from Q2 2016 and a seven point increase from a year ago (Q3 2015).

In the latest online survey, conducted August 10 - September 2, 2016, the three key drivers of New Zealand’s confidence all increased from the previous quarter.

Immediate spending intentions of Kiwis has increased, rising from a 39% from Q2 2016 to a high of 48% in the third quarter of 2016. A nine percentage point increase of those planning to open their wallets for things they want and need.

Positive perceptions about local job prospects over the next 12 months increased in the third quarter of the year. Over half of New Zealand respondents (54%) believed the job market would be good or excellent in the upcoming year, a quarterly increase of 8 percentage points.

More than half (57%) of New Zealand respondents regarded their personal finances positively, an increase of two percentage points from the previous quarter - a level that has been reasonable steady for three consecutive quarters.

Nick Tuffley, ASB Bank’s Chief Economist, said, “The New Zealand economy has been sustaining good momentum over the past year, translating into improved job opportunities. Improved rural conditions will be playing a part in the more positive outlook. Dairy prices began recovering substantially over the survey period. Meanwhile, fruit exports have performed well, particularly kiwifruit, and tourism is boosting growth around the country. Consumer inflation is low and interest rates are set to remain very low for a long time, conditions that are clearly encouraging stronger retail spending.”

The mood of rural consumers has improved. Eight in 10 New Zealand farmers and growers expect the business climate to stay the same or improve over the next 12 months, according to Nielsen’s Rural Report 2016, with dairy farmers and horticulturalists being the most optimistic.

Tony Boyte, Director, Nielsen New Zealand, said, “Increased optimism in the rural sector is set to translate into spend. After canvassing New Zealand farmers and growers spending intentions over the next year, we see that nearly a third of farmers and growers plan to invest in farm machinery and equipment (29%). Around a quarter are looking to spend on insurance (28%) and IT/Technology (24%). A fifth are looking at banking and finance products (21%), vehicles (19%) and infrastructure under $200,000 (17%).

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