Consumer confidence up in August

New Zealand consumer confidence rose in August with little sign that a cooling housing market is hurting consumer sentiment.

The ANZ-Roy Morgan consumer confidence index rose to 126.2 in August from 125.4 in July.

Of that, the current conditions index was unchanged at 124.9 and the future conditions measure rose 1.3 points to 127.1.

ANZ Bank New Zealand chief economist Cameron Bagrie said that on a seasonally adjusted basis, confidence rose to its highest level since July 2014 and that Thursday’s survey shows consumers remain in a “buoyant mood”.

The consumer confidence survey follows the release of business confidence for July which showed a net 19 per cent of firms surveyed in the ANZ Business Outlook expect general business conditions to improve over the coming year, down from 25 per cent in June.

The latest housing data from the Real Estate Institute showed a sharp slowdown in house sales with volumes dropping 25 per cent nationwide last month compared to July 2016, with Waikato sales dropping 32 per cent and Auckland sales down 31 per cent.

Bagrie noted, however, the moderation across the housing market “is not taking the wind out of consumers’ sails”.

Among other things, house prices outside of Auckland are still lifting, albeit more modestly and “outside of the housing market, jobs are plentiful, and commodity prices are strong – it’s no accident that the South Island (excluding Canterbury) is now the most upbeat region”.

”The Budget put $2 billion on the table for families and the election lolly scramble is underway,” he said.

A net 12 per cent of those polled felt financially better off than they did a year ago.

For the economy as a whole over the next 12 months, a net 25 per cent expected better times financially.