High consumer confidence a good sign for retail sector – ANZ

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Consumers are feeling much more jolly heading into the holiday season with confidence edging closer to historical highs.

Christmas shopping in Wellington.

High consumer confidence is a good sign for the retail sector, ANZ chief economist Sharon Zollner said.
Photo: RNZ / Rebekah Parsons-King

The monthly ANZ-Roy Morgan Consumer Confidence Index rose 5 points this month to 112, which was approaching the historical average of 120.

ANZ chief economist Sharon Zollner said the numbers were still down on levels achieved in 2017 to 2019.

“In a good sign for the retail sector. The proportion of people who believe it is a good time to buy a major household item lifted 7 points,” she said, adding the reading had still undershot the last quarter.

Zollner said households remained wary about whether it was a good time to buy a major household item, amid concerns about the sustainability of their discretional spending.

“2021 won’t be smooth sailing, but we’re going into it in pretty good heart, all things considered,” she said.

Perceptions regarding the next year’s economic outlook lifted 12 points to a net negative 6 percent, while the five-year outlook rose 3 points to a net positive 18 percent.

Consumer perceptions about their current financial situations rose 3 points.

A net 25 percent expected to be better off financially this time next year.

House price inflation expectations were also up, with sentiment strongest in the South Island, excluding Christchurch.

“Inflation therefore bears watching, as it holds the key to future interest rates,” Zollner said.

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