New Zealand’s consumer confidence rose in May for the first time in four months, adding to signs of a recovery in regions outside earthquake-damaged Christchurch, a private survey showed.
The ANZ-Roy Morgan confidence index rose to 103.2 from 101.4 in April, according to an e-mailed statement from Wellington-based ANZ National Bank Ltd. today. A number of more than 100 shows that optimists outnumber pessimists.
Confidence is weaker than levels recorded before the magnitude-6.3 temblor that struck the South Island city on Feb. 22, adding to the case for central bank Governor Alan Bollard to leave the benchmark interest rate at a record low. The central bank kept the official cash rate at 2.5 percent last month and said low borrowing costs would be appropriate “for some time.”
“We can see elements of clear support for spending to begin diffusing through the economy,” ANZ Chief Economist Cameron Bagrie said in the statement. Still, the support is facing “headwinds” from consumers’ preference to save rather than spend, rising food and fuel costs and uncertainty about jobs and house prices, he said.
Twelve of 17 economists surveyed by Bloomberg News last month predict the benchmark rate will be kept unchanged for the rest of this year.
The number of respondents saying they expect the economy will deteriorate over the next 12 months fell to 43 percent from 48 percent in April, while the number expecting better times rose to 27 percent, today’s report showed.
The proportion of the 1,078 respondents who said they expect to be better off financially a year from now rose to 43 percent from 42 percent. More people said it is a good time to buy a major household item, according to the report.
Confidence in Christchurch and the surrounding Canterbury province fell to a two-year low. Sentiment increased in Auckland, the largest city, and the capital, Wellington, ANZ said.