11 November 2015 – New Zealand’s consumer confidence has fallen to its lowest level since 2013 in response to unmet economic growth expectations including a tumultuous quarter for the dairy industry. Nielsen’s Global Consumer Confidence Index Q3 2015, which measured confidence prior to the Rugby World Cup win, reported an eight percent drop from Q3, 2014 and five percent drop from Q2, 2015, to 94.
Nicky Tuffley, Chief Economist at ASB Bank, said, “There have been a few events that will be unsettling NZ consumers at the moment. The economy has been losing momentum this year. The dairy sector has come under pressure from weak prices and a cash-flow crunch, which will reverberate around parts of rural NZ over the next year. The global economy has been a bit wobblier, with a lot of focus on China. And interest rates have been falling – a positive ultimately for the economy, but a signal that the economy is not sailing as well as it seemed earlier in the year.”
Nielsen’s report found that the economy is now the biggest concern for New Zealanders, with 1 in 4 Kiwis saying it’s their biggest or second biggest concern in the next six months. A year ago only 1 in 7 shared this concern. The economy now out-rates seven other factors for concern including health, job security and debt to become the nation’s leading concern. Rising concerns for the economy are matched with consumer outlook on their own job prospects. A year ago more than half of all New Zealanders were optimistic about their job prospects for the next year; today this is less than half.
Rob Clark, Nielsen Managing Director New Zealand, said that the market is experiencing a decrease in positive sentiment because of unmet growth expectations. “New Zealand has in recent times been held up as one of the strongest economies in the world post the Global Financial Crisis (GFC), however GDP growth expectations simply didn’t transpire and as a result, confidence has waned,” said Clark.
Personal finance fears are also increasing, with 45% of consumers saying they have a negative outlook on their personal finances, a six-point increase from the same period last year. More than 2 in 5 New Zealanders (45%) say the outlook for their personal finances is not good. This has natural flow through to Kiwi’s confidence to spend. Three in every five New Zealanders now say that it is not a good time to buy the things they want and need.
Globally, consumer confidence increased three index points in the third quarter to reach a score of 99, the highest level since 2006. The global results reveal the overall optimistic sentiment for job prospects, personal finances and spending intentions, which have increased in nearly half (48%) of all measured markets.
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ABOUT THE GLOBAL SURVEY OF CONSUMER CONFIDENCE AND SPENDING INTENTIONS
The Nielsen Global Survey of Consumer Confidence and Spending Intentions was conducted Aug. 10 – Sept. 4, 2015 and polled more than 30,000 online consumers in 60 countries throughout Asia-Pacific, Europe, Latin America, the Middle East/Africa and North America. The sample has quotas based on age and sex for each country based on its Internet users and is weighted to be representative of Internet consumers. It has a margin of error of ±0.6%. This Nielsen survey is based only on the behavior of respondents with online access. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60% Internet penetration or an online population of 10 million for survey inclusion. The China Consumer Confidence Index is compiled from a separate mixed methodology survey among 3,500 respondents in China. The sub-Saharan African countries in this study are compiled from a separate mobile methodology survey among 1,600 respondents in Ghana, Kenya and Nigeria. The Nielsen Global Survey, which includes the Global Consumer Confidence Index, was established in 2005.
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