- Cameron Bagrie, ANZ chief economist
New Zealand consumer confidence dropped in December as confidence over future conditions waned. The ANZ-Roy Morgan consumer confidence index declined 4 points from a six-month high to 118.7 in the run-up to Christmas, with a reading above 100 thresholds shows optimists outnumber pessimists. The one-year ahead outlook for the New Zealand economy plummeted 9 points in December to 6, while confidence in current conditions remained relatively flat, sliding less than one point to 122.1. Expectations for consumer price inflation over the next two years declined to 3.1% from 4.1% in the previous survey. The Reserve Bank of New Zealand is closely watching inflation expectations to assess how they affect wage and price behaviour. Inflation in New Zealand climbed 0.4% in the third quarter, considerably below the central bank's 1%-3% target range.
Separately, New Zealand's manufacturing sector continued to expand at a solid clip in November. The Business NZ-BNZ performance of manufacturing index climbed from a revised 53.2 in October to 54.7 last month, where a reading above 50 signals an expansion in activity.
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