23 Mar 2015
New Zealand Westpac consumer confidence on the rise in Q1 2015
FXStreet (Bali) - New Zealand Westpac consumer survey climbed from previous 114.8 to 117.4 in 1Q 2015, with lower petrol prices and fixed mortgage rates contributing to the rise, notes Westpac.
Felix Delbrück, Senior Economist at Westpac
The lift in the latest Westpac McDermott Miller Consumer Confidence Index comes as no surprise. Petrol prices and fixed mortgage rates have continued to fall since the previous survey, while share prices and house prices have continued to rise. Rising consumer confidence is also in keeping with the very strong electronic card spending data we saw over January and February.
What did surprise us was the regional breakdown. Falling dairy prices caused rural sentiment to tumble in the December survey, and after the recent drought we were braced for more rural gloom. However, consumer sentiment in rural regions and smaller centres has rebounded, and is now actually higher than it was six months ago. Meanwhile, urban sentiment moved marginally lower over the quarter, and is more or less where it was half a year ago.
The rebound in rural confidence may in part reflect recovering global dairy prices (the survey responses were collected in the wake of some large rises in the GlobalDairyTrade auctions). The lack of urban exuberance is more puzzling, given the combination of cheap petrol, falling interest rates and rising asset prices.
One explanation may be the mixed blessing of high and rising house prices – good for existing property owners, not so much for those trying to get on the property ladder. Another may be the high exchange rate. While the NZ dollar has fallen against the US dollar, it has moved sharply higher against the euro, yen and Australian dollar. That is not good news for export-oriented and import-competing manufacturers, who tend to cluster in the urban centres
Felix Delbrück, Senior Economist at Westpac
The lift in the latest Westpac McDermott Miller Consumer Confidence Index comes as no surprise. Petrol prices and fixed mortgage rates have continued to fall since the previous survey, while share prices and house prices have continued to rise. Rising consumer confidence is also in keeping with the very strong electronic card spending data we saw over January and February.
What did surprise us was the regional breakdown. Falling dairy prices caused rural sentiment to tumble in the December survey, and after the recent drought we were braced for more rural gloom. However, consumer sentiment in rural regions and smaller centres has rebounded, and is now actually higher than it was six months ago. Meanwhile, urban sentiment moved marginally lower over the quarter, and is more or less where it was half a year ago.
The rebound in rural confidence may in part reflect recovering global dairy prices (the survey responses were collected in the wake of some large rises in the GlobalDairyTrade auctions). The lack of urban exuberance is more puzzling, given the combination of cheap petrol, falling interest rates and rising asset prices.
One explanation may be the mixed blessing of high and rising house prices – good for existing property owners, not so much for those trying to get on the property ladder. Another may be the high exchange rate. While the NZ dollar has fallen against the US dollar, it has moved sharply higher against the euro, yen and Australian dollar. That is not good news for export-oriented and import-competing manufacturers, who tend to cluster in the urban centres