New Zealand consumers found their nerve in July but rising oil prices are probably going to weigh in the next report. The ANZ-Roy Morgan index jumped 8 points to 99.3, a third straight monthly gain that leaves it 19 points off the April trough of 80.3. It’s still 8 points shy of the January peak, and still below the 100 line, but the direction of travel has flipped.
The forward-looking piece did the heavy lifting. Future conditions surged to 106.5 from 96.7 — the first read above neutral since February. Current conditions rose 5.3 points to 88.5, which is progress but hardly a boom.
The details:
- Households saying they’re worse off than a year ago improved to a net -16% from -23%, the best since March
- A net 21% expect to be better off next year, up 11 points and the strongest since January
- The 12-month economic outlook lifted to -13% from -23%; the five-year measure rose 9 points to +12%
- A net 7% still say it’s a bad time to buy a big-ticket item, up 4 points but nowhere near positive territory
- Two-year inflation expectations unchanged at 4.6%
- House price expectations slipped to 2.6% from 3.0%
That inflation expectations line is the one to circle. The RBNZ opened a new tightening cycle on 8 July with a 25bp OCR hike and households didn’t blink — 4.6% is where expectations sat in June, and it’s a long way from anything the central bank can call anchored. Wholesale rates barely moved on the hike, so the transmission story here is entirely about headlines and fuel prices.
The weekly breakdown shows confidence spiking above 105 in the first half of July, then rolling over hard into the final week as oil turned higher mid-month. Inflation expectations did the mirror image, ending the month above the monthly average. The consumer who answered the survey on 6 July is not the consumer who answered on 27 July.
Housing remains the quiet drag — expectations for house price inflation have now halved from the 5%-plus readings of a couple of years ago, and at 2.6% they’re barely keeping pace with the wealth-effect math homeowners need to loosen the purse strings.
