Economy may struggle over second half of the year - report

Consumer confidence is remaining level but the economy could be approaching tougher times, according to the ANZ-Roy Morgan Consumer Confidence Index.

The report shows that consumer confidence was unchanged in August at 118, which sits around the historical average.

It also suggests that households are upbeat about current conditions but remain a little cautious about the outlook, with only a net of 26% of consumers expecting to be better off financially this time next year.

Wellington is by far the most confident region at 131, although down by 1 point. Confidence fell 2 points in Auckland to be in last place at 113.

Expectations for national house price inflation also fell from 3.7% to 3.4% year-on-year, with the bounce losing steam. The South Island ex-Canterbury is in the lead at 4.8%, while Canterbury is weakest at 2.4%.

According to the report, perceptions of current conditions remain strong but there is a certain degree of caution around the future. This is likely a reflection of the current economy rather than the participants’ individual financial situations.

“We suspect the economy may indeed struggle over the second half of the year,” the report stated. “The economy is transitioning and some areas of the policy landscape remain uncertain. But the economy still has much going for it – not least of which is a decent fiscal stimulus later this year – and we expect it will muddle through.”