New Zealand’s consumer confidence has fallen to its lowest level since 2013 in response to unmet economic growth expectations, including a tumultuous quarter for the dairy industry. Nielsen’s global consumer confidence index for quarter three, 2015, which measured confidence prior to the Rugby World Cup win, reported an eight per cent drop from quarter three, 2014, and a five per cent drop from quarter two, 2015, to 94.
Nicky Tuffley, chief economist at ASB Bank, said, “There have been a few events that will be unsettling NZ consumers at the moment. The economy has been losing momentum this year. The dairy sector has come under pressure from weak prices and a cash-flow crunch, which will reverberate around parts of rural NZ over the next year. The global economy has been a bit wobblier, with a lot of focus on China. And interest rates have been falling, a positive ultimately for the economy, but a signal that the economy is not sailing as well as it seemed earlier in the year.”
Nielsen’s report found that the economy is now the biggest concern for New Zealanders, with one in four Kiwis saying it is their biggest or second biggest concern in the next six months. A year ago only one in seven shared this concern. The economy now outrates seven other factors for concern including health, job security and debt to become the nation’s leading concern. Rising concerns for the economy are matched with consumer outlook on their own job prospects. A year ago more than half of all New Zealanders were optimistic about their job prospects for the next year; today this is less than half.
Rob Clark, Nielsen MD, NZ, said that the market is experiencing a decrease in positive sentiment because of unmet growth expectations. “NZ has in recent times been held up as one of the strongest economies in the world post the global financial crisis; however GDP growth expectations simply didn’t transpire and as a result, confidence has waned.”
Personal finance fears are also increasing, with 45 per cent of consumers saying they have a negative outlook on their personal finances, a six-point increase from the same period last year. More than two in five New Zealanders (45 per cent) say the outlook for their personal finances is not good. This has natural flow through to Kiwi’s confidence to spend. Three in every five New Zealanders now say that it is not a good time to buy the things they want and need.
Globally, consumer confidence increased three index points in the third quarter to reach a score of 99, the highest level since 2006. The global results reveal the overall optimistic sentiment for job prospects, personal finances and spending intentions, which have increased in nearly half (48 per cent) of all measured markets.
