Consumer confidence takes another knock

New Zealand consumer confidence fell for a second month as more people felt worse off than they did a year ago, amid higher electricity and petrol prices and ongoing weakness in the housing market.

Consumer confidence fell to 115.6 from 122 last month in the ANZ-Roy Morgan Consumer Confidence poll.

That’s the lowest level in almost a year, and comes as the government’s Emissions Trading Scheme comes into effect, adding $5 a week to the average household’s electricity and fuel bills.

A soggy housing market will also keep consumers downbeat, as property values fall and people struggle to sell their houses.

"It looks like households will remain cautious with their spending for a while,” said ANZ New Zealand’s Khoon Goh and Roy Morgan’s Mark Dansey in their report. “It seems the negatives are outweighing the positives in consumers’ minds at present."

After a flurry of optimism at the start of the year, consumers have become more pessimistic as the global economic recovery showed signs of stalling, while New Zealand’s economy hasn’t bounced back as fast as earlier thought.

People continue to pay down debt rather than ramp up spending, though yesterday’s credit billings data showed a 1.5 percent  month-on-month increase in June. 

"Despite the economy being out of recession for well over a year now, consumers are still feeling the recessionary effects on their own finances," the report said. 

A net 14 percent  of respondents felt worse off than they did a year ago, while only a net 3 percent  expect good economic conditions in the coming year, down from a net 18 percent  last month. 

The five-year outlook stayed buoyant, with a net 42 percent expecting good times over the period, and a net 22 percent still think it’s a good time to buy major household items, compared to a net 28 percent last month. 

- BusinessDesk