Economic confidence in Bay of Plenty falls sharply

Dominick Stephens. Supplied Image.

A net 29 percent of Bay of Plenty households expect their region's economy to improve over the next 12 months, according to the Westpac-McDermott Miller Regional Economic Confidence survey for the September 2018 quarter.

This is significantly lower than the 45 percent recorded in June and represents the biggest decline across all regions in the September quarter.

'The drop in household confidence in the Bay of Plenty reverses almost all of the gains achieved in the previous quarter,” says Westpac Chief Economist Dominick Stephens.

'This is a surprising result given that business is booming, unemployment is falling, and government investment and spending is on the up. The main reason for the decline in confidence is likely to be technical, with a relatively large number of respondents that previously stated they had confidence in the region's economic future opting not to respond in the most recent survey.”

The Westpac-McDermott Miller survey also examines consumers' views on their own economic situation, producing an index that summarises responses to questions including how respondents view their own financial situation, their current willingness to buy a major household item and the outlook for the national economy.

The Westpac-McDermott Miller Consumer Confidence Index for the Bay of Plenty fell from 112 in June to 109 in the September quarter.

'Consumers in the Bay of Plenty are feeling less confident than they have been about the New Zealand economy, and a relative few still expect their financial circumstances to improve over the next 12 months,” says Dominick. 'With more households feeling worse off than before, retailers should be wary.”

The survey was conducted over the period 1-10 September 2018.

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