newzealandinc.com Informed. Influential. Indispensable.
New Zealand consumer confidence eased in July as higher petrol prices and the prospect of rising mortgage rates dented financial sentiment.
The ANZ-Roy Morgan consumer confidence index slipped to 119.8 from a three-year high of 123.9 in June. The current conditions index dropped 4 points to 118 and sentiment on future conditions eased 5 points to 121.
All five questions used to calculate the overall measure recorded slightly weaker net balances versus a month earlier. For the first time in three months a greater share of respondents felt that versus a year ago they were worse off financially, with the measure at 34 percent, versus 31 percent feeling better off.
“Rising petrol prices eating into disposable incomes are the likely cause of this turnaround,” ANZ New Zealand economist Steve Edwards said in the report. “In conjunction, higher longer-term fixed mortgage rates over the month are a hint of things to come for homeowners.”
The proportion of people expecting better economic conditions for New Zealand over the next 12 months eased to 14 from 16 in June. Still, the reading remains the second-highest level of optimism in two and a half years.
A combination of consumer and business confidence signals acceleration in economic growth to around 4 percent by the end of the year, the report said.
Those deeming it a good time to buy a major household item slipped for a second month, to 39 from 41.