e Canterbury rebuild is peaking, and growing concerns around the health of the Chinese economy. “If anything, we were braced for worse. Make no mistake, consumers have become more cautious, particularly in rural areas. But overall, spending appetites are still at moderately healthy levels.” The survey was conducted over September 1 to 11, with a sample size of 1550. An index number over 100 indicates that optimists outnumber pessimists. The margin of error of the survey is 2.5 per cent. Among the index’s component questions, the biggest change was to respondents’ expectations for the near-term economic outlook, with a net 15 per cent now expecting mainly bad economic times for the year ahead, compared to a net 4.8 per cent expecting good economic times three months ago. There were also more modest declines in respondents’ longer-term economic outlook and their assessment of their own financial situation. The net percentage expecting mainly good economic times over the next five years fell from 24.3 per cent to 24.1 per cent, while the net percentage expecting their own finances to improve over the year ahead fell from 5.9 per cent to 4.6 per cent. The net percentage saying their financial situation had improved over the past year fell from 1.4 per cent to three per cent. There was relatively little change in consumers’ reported attitudes to spending. The biggest decline was in the net percentage saying that now is a good time to buy a major household item, falling from 28.8 per cent to 19.5 per cent. ”New Zealand consumers remain optimistic, but confidence is the lowest it has been since September 2012,” announced Richard Miller, MD in strategy and economics consultancy, McDermott Miller. “This continues the slippage from the index peak of 121.7 in March 2014. “The Westpac McDermott Miller NZ consumer confidence index for the September quarter fell to 106.0, down from 113.0 in June. “Confidence in short-term prospects for the NZ has sagged, with a net 15 per cent now expecting bad times over the coming year, down from a net five per cent expecting good times in March. Consumers put their pessimism down to ‘low dairy prices’ and ‘ineffective government economic policy’ (29 per cent). “Reasons for pessimism diverged somewhat between metropolitan and rural consumers expecting bad times. “The former are expecting bad economic times because of ‘ineffective government economic policy’, followed by ‘low dairy prices’ (23 per cent). Unsurprisingly, a net 25 per cent of rural consumers expect bad times, with some 39 per cent blaming ‘low dairy prices’ and 30 per cent pointing to ‘ineffective government policy’. “Perhaps more worrying for retailers is the fall in the net percentage of consumers thinking now is a good time to buy major household items (from 29 per cent in June to 20 per cent in September). The main reason given by some 26 per cent is ‘they have no money to spend’. When this factor is put alongside negative sentiment over NZ’s short term economic prospects, a slowing down in growth of retail sales is likely in the months ahead. “Confidence amongst consumers employed in both the private and public sectors fell again in the September quarter (private sector employees down 8.7 points to 108.3 and public sector employees down 9.9 points to 100.9). “There has been a sharp increase in expectations of bad economic times in the next twelve months, with a net 16 per cent of private sector employees now expecting bad times (compared to a net 5.4 per cent expecting good times in June), while a net 28 per cent of public sector employees now expect bad times (up from one per cent in June). Private sector and public sector consumers give different reasons for their pessimism about the short-term economic outlook. Private sector employees cite ‘low dairy prices’ (40 per cent), while some 26 per cent of public sector employees agree, but more public sector employees are inclined to blame ‘ineffective government economic policies’ (31 per cent, compared to 18 per cent of private sector employees). “Generally, the September quarter Westpac McDermott Miller NZ consumer confidence survey shows consumers remain optimistic. “But the significant September quarter drop in the consumer confidence index reflects growing doubts about current economic policy settings among consumers and indicates hesitancy in consumer spending.”