Consumer confidence remains low, with palpable nervousness about long term prospects pushing it back down to the levels of a year ago.
Photo: 123rf
The Westpac-McDermott Miller quarterly survey showed a fall in consumer confidence of 0.8 points to 105.2. The score is below the long-term average and is a decline from a sharp rebound at the end of last year.
Senior economist Satish Ranchhod said the survey was carried out in early March, amid 'dialled up Covid-related restrictions' that were "likely to have dampened some households' spirits."
"While the economy is getting back on firmer footing, many households are still concerned about the economic backdrop," he said.
"We're now wrestling with a different set of challenges; while the economy is continuing to grow it's very uneven, and labour intensive sectors like tourism are struggling with job losses."
The number of people who said they were worse off financially fell slightly, to 11.7 percent, but longer term a net 15 percent expected to be better off in a year's time.
However, a clear divide was emerging between age groups, with those aged 18 to 29 markedly more pessimistic than other age groups.
Ranchhod said that reflected that older age groups were more likely to be home owners, and thus feeling more confident because of rising property prices.
The number who thought it was a good time to buy a major household item fell from a net 6.5 percent in December to 4.2 percent, while the number who would spend a $10,000 cash windfall was up from a year ago, reflecting the fall in interest rates.
"I don't think that actually reflects a reluctance to spend, in fact we are seeing them buy a lot of items, but I think there's a lot of nervousness about whether they can actually source the items they want given the big disruptions to global shipping," Ranchhod said.
Consumer confidence was mixed around the country with falls in Auckland, Bay of Plenty, Gisborne-Hawkes Bay, and the top of the South Island.
"I think the move back into lockdown has had a big impact on Auckland and other areas that are heavily exposed to the hospitality sector and the international border," he said.
Wellington was the most bullish city because of its low reliance on international tourism and the stability that came with public sector employment.