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Consumer confidence rebounds in Roy Morgan poll
Consumer confidence has rebounded strongly in the last two weeks to levels last seen in March, according to a Roy Morgan poll.
Signs are emerging that lower petrol prices, lower interest rates and the lower New Zealand dollar are improving the outlook for some households and exporters, despite a weak housing market and high food prices.
This poses some intereting questions for the Reserve Bank as it considers cutting interest rates again next Thursday. Could the economy bounce back without an extra helping hand from the Reserve Bank? Most economists expect a 25 basis point cut in the Official Cash Rate to 7.75%.
The early September reading on consumer confidence by Roy Morgan was 107.3, up 12.4 points from mid-August and the highest since early March.
Here's the details on the survey results below from Roy Morgan.
The leap in the New Zealand Roy Morgan Consumer Confidence rating is driven predominantly by New Zealanders' expectations of the economy in the next 12 months. Fewer New Zealanders (43% - down 12%) expect bad times for their economy in the next 12 months and more expect good times (35% - up 10%).
New Zealanders are also feeling more positive about the next five years with 49% (up 7%) expecting good times for their economy as a whole and just 23% (down 8%) expecting bad times.
Most New Zealanders (53% - up 3%) expect to be better off financially this time next year, while only 19% (down 6%) expect to be worse off.
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Many New Zealanders (47% - down 4%), however, still feel that their family is worse off financially than last year, while 27% (down 1%) say they are financially better off.
More New Zealanders (45% - up 6%) say now is a good time to buy major household items, while 40% (down 7%) believe now is a bad time to buy major household items.
8 Comments
I have come to the
I have come to the conclusion that by far the single biggest driver of consumer confidence is the petrol price - I reckon it make up more than 50% of what folks expectations are, it is quite remarkable (with IMO interest rates a distant second). I noticed the correlation back in 2006 with the first big surge in the petrol price which caused confidence to tank and then again early this year.
Whats with the kiwi this morning its getting plucked.
And yet warning from The
And yet warning from The USA
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/09/04/cnusec...
I think our $ is falling with commodities like the Aussie but honestly I haven't got a clue
Oh I don't doubt that
Oh I don't doubt that the confidence is misplaced - its just that at the moment the inverse correlation with petrol prices is so strong. Just goes to show how the health of our economy is wedded to cheap petrol.
Imagine what petrol at $3 would do to confidence on that basis.
The improved consumer confidence reading
The improved consumer confidence reading really just shows that you can fool most of the people most of the time. When consumers find that their favourite imports have gone up in price due to a plunging NZD, they won't be so keen to open their wallets. The RBNZ should get ahead of the game & cut 50 bps at its next meeting. Sinking asset prices will overwhelm any other factor over the next couple of years.
Andy, you might have seen Bill Gross's commentary that came out this morning - suggesting that a financial meltdown will soon be with us unless the US Treasury steps in as the lender of last resort. Various hedge funds are also rumoured to be in trouble and are dumping assets. These seem to be the biggest factors leading to the selloff in US stocks and the dumping of risk assets like the NZD.
Yes I saw Gross's comments
Yes I saw Gross's comments - basically he told Paulson he wasn't going to be buying any of the rubbish out there unless the Treasury was prepared to. Amazing, talk about putting your marker down.
Yes, agree re;hedge funds, Ospraie (sic) was clearly dumping commodities bets left right and center before it imploded.
A 0.5% cut - blimey Dosser you'll have the kiwi trading at 55 cents to the US$ if he does that LOL!
I tell you what it
I tell you what it shows what a pretty pickle we are in when investors flee to the US$. Talk about the refuge of last resort! We could see another 300 point fall on the Dow Friday if those unemployment figures are poor (which I think they may be).
I just saw the kiwi at .659, at this rate petrol will have to go UP again.
I reckon that the Roy
I reckon that the Roy Morgan survey must have included a lot of Real Estate Agents in order to come up with a rise like that. I went to an open home at the weekend, where I was the only person there, and the Agent was trying to convince me that the market was now picking up. Yeah right!
This was just one aspect
This was just one aspect of the latest roy morgan polling that is difficult to reconcile with reality.