Consumer confidence dropped further in July, falling back to long-run averages.
The ANZ Roy Morgan consumer confidence index edged 2 points lower to 118 in July. The current conditions index fell 1 point to 124.9, above its historical average of 116.7, while the future conditions index fell 2 points to 114.1, well below its historical average of 121.
Of the survey's 1,009 respondents, a net 3 percent expected good times financially in the next 12 months, down from 7 percent in June and the lowest since March 2016. Over the next five years, a net 14 percent predicted continuous good times, down from a net 16 percent in June.
Consumers’ perceptions of their current financial situation rose 3 points, with a net 14 percent of those surveyed reporting they're feeling financially better off than a year ago.
"Consumer confidence has taken a step down since the start of the year, but only to about average levels, rather than anything alarming,” said ANZ Bank New Zealand chief economist Sharon Zollner. "While perceptions of current conditions remain pretty solid, there is a degree of wariness about the future, focused on the economy as a whole rather than respondents’ own financial situations."
General inflation expectations were unchanged from June, with respondents expecting a 3.9 percent increase per year over the next two years. Those surveyed in July expect house prices will rise 3.7 percent per year over the next two years, up from a 3.6 percent annual gain seen in June.
Zollner said the bank's composite gauge "is still suggesting around 2 percent GDP growth but is on a downward trajectory, primarily as a result of falling business confidence metrics."
"We do expect some harder yards for the economy going forward, with growth harder won. This far into an economic cycle the low-hanging fruit has typically been picked, and a number of growth drivers are fading. But that’s a far cry from calling time on the economic expansion."