- Consumer confidence lowest ever, says ANZ-Roy Morgan survey
- Low confidence stems from households facing soaring inflation and high interest rates
Kiwis’ confidence in the economy was at an all-time low in February. House prices and rising inflation were the main concerns for them. According to ANZ-Roy Morgan survey, consumer confidence in the economy had slipped to lower than when COVID started. The index was down 16 points for the period to stand at 82 points, which is the lowest since the Bank began its surveys in 2004.
Households also felt that it was a bad time to buy a major household item, at -21, down 17 points.
© Rawpixelimages | Megapixl.com
The dip in confidence can be attributed mainly to the Omicron spread, but also partially to the Russian invasion of Ukraine.
The low confidence comes when households are facing a tough time because of rising prices, the spectacle of rising interest rates, and increasing petrol prices.
Chief Economist of ANZ Bank, Sharon Zollner said that there were a lot of headwinds but was hopeful of a bounce back, nevertheless. Zollner agreed that the data for February was very grim but hoped that it would blow over.
The survey is for one month period from 31 January – 27 February. Roy Morgan surveyed 1000 households on their financial position and New Zealand's economic conditions as a whole.
Another survey by the Financial Services Council (FSC) Financial Resilience Index also pointed out that the Kiwis were worried about the future of the NZ economy.
The volatility of the global and local markets due to Russian invasion of Ukraine further reinforced this sentiment, the survey said. There was also a drop in financial literacy amongst New Zealanders by 5% from last year. This was alarming as economy was on a downtrend currently.
Bottom Line: NZ consumer confidence was the lowest ever due to the present economic conditions of high inflation and rising interest rates. Two different surveys marked this trend.