Consumer confidence increases, but 'willingness to spend' remains low

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A new survey is pointing to improving sentiment among consumers, but shows households are not quite yet ready to open up their wallets.

The ANZ-Roy Morgan Consumer consumer confidence index rose 1 point in December to 93.1, with pessimists continuing to outweigh optimists.

It painted a similar picture to a Westpac survey earlier this week.

In more bad news for retailers, a net 25 percent of people felt it was a bad time to buy a major household item, unchanged from the previous month.

Two-year inflation expectations fell from 4.6 percent to 3.9 percent, the lowest level in three years, which ANZ said was likely driven by a fall in petrol prices.

“Willingness to spend remain slow, as the RBNZ [Reserve Bank] requires in order to bring inflation down, and consumers’ inflation expectations finally took a renewed decent leg lower – even if it is likely largely due to fickle petrol prices,” ANZ chief economist Sharon Zollner said.

Households appeared to be more positive about their own outlook, with a net 25 percent expecting to be financially better off in a year’s time, the best result since mid-2021.

However, perceptions about their current financial situation remained low, despite an improvement.

“The wide gap between the current and forward-looking questions in the survey persists. This is typical during and after periods in which the economy is weak, such as 2009-10,” Zollner said.