New Zealand consumer confidence started 2015 with an index score of 102, which is an increase of one point from fourth quarter 2014 and an increase of two points from a year ago. New Zealand remained ahead of both Australia (95) and global (97) confidence.
The Nielsen consumer confidence index measures perceptions of local job prospects, personal finances and immediate spending intentions. For job sentiment, 59 per cent of New Zealand respondents said local job prospects were good or excellent, a four percentage point increase from fourth quarter 2014. Personal finances also improved, with 62 per cent having positive perceptions of their finances, up from 59 per cent in the previous quarter.
The question as to whether it is a good time to buy things over the next 12 months remained at 44 per cent.
New Zealanders discretionary spending intentions remained steady or increased in the first quarter across lifestyle categories measured. About three in 10 respondents (29 per cent) planned to spend on holidays. One in five New Zealanders planned to spend on new clothes (21 per cent), out of home entertainment (20 per cent) and new technology products (19 per cent).
New Zealand saving intentions also increased; about half New Zealand respondents planned to bank their spare cash (49 per cent), a third intended to pay credit cards and debt (34 per cent) while 16 per cent said they had no spare cash, down from 22 per cent the previous quarter.
ASB’s chief economist, Nick Tuffley’s, said, “The outlook for the economy remains solid. Perceptions of personal finances will have been boosted by the relatively low level of fuel prices relative to 2014 and the ongoing fall in term mortgage rates that are reducing borrowers’ debt-servicing costs. Job growth has been solid over the past year. But there will be some added caution in dairying areas about the continued softness in dairy prices, which may be contributing to the added intentions to channel any spare cash into savings or debt reduction.”
Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism, respectively.
Among the world’s largest economies, consumer confidence increased most in Japan, rising nine points to 82 in the first quarter. This was its highest score since 2005, which was the start of Nielsen’s consumer confidence index measurement. Germany also reached a milestone in that sentiment increased two points to reach the baseline score of 100. Confidence also increased one point in the US (107), three points in the UK (97) and three points in France (60). Conversely, confidence in China decreased one point to 106 from fourth quarter 2014.
In the latest online survey, conducted from February 23 until March 13 2015, consumer confidence increased in 37 of 60 markets measured by Nielsen (61 per cent), compared with 17 of 60 markets (28 per cent) in the previous quarter. India’s score of 130, the highest score among 60 markets, was one point higher than in fourth quarter 2014, followed by Indonesia (123), the Philippines (115) and the United Arab Emirates (115). Italy (57) showed the biggest quarterly improvement as confidence rose 12 points from fourth-quarter 2014. The Ukraine reported the lowest score of 41, a quarterly decline of 11 points, which constitutes the biggest decline in the survey.
The Nielsen Global Survey of Consumer Confidence and Spending Intentions, established in 2005, measures consumer confidence, major concerns and spending intentions among more than 30,000 respondents with internet access in 60 countries, including 500 New Zealanders.
