Rising sentiment from both consumers & business signals a strengthening phase in 2016, says ANZ. Other sectors brush off dairy weakness

Local confidence in the New Zealand economy is rising.

Today’s release of the ANZ-Roy Morgan consumer confidence index shows it jumping to a six month high.

This comes after the ANZ business confidence index recently did something similar.

The bank’s economists now say this is significant and “suggests the economy will move beyond consolidation and into a strengthening phase in 2016”.

They say not only are consumers more upbeat about the economy, more people are feeling financially better off than they were a year ago.

And they say their survey shows more people think now is a good time to buy a major appliance than previously.

“Low mortgage interest rates look to (be) working their magic. While this is not great news for savers, it is a boon to borrowers provided they don’t completely lose the plot; borrow and spend style growth can only be a temporary phenomenon.”

“Amidst still challenging times for some sectors (dairy) and a slight lift in the unemployment rate, it foretells of an economy that is far broader than cows alone. Witness surging tourism inflows for example, with the sector set to outdo dairying as our largest source of export receipts over the year ahead.”

All regions experienced a lift in confidence for the second straight month, according to their tracking. Canterbury consumers remain the most optimistic, but the most ground has been made up by the regional North Island.

Auckland confidence is now in the middle of the pack, and while confidence in the capital is picking up, it remains the least optimistic overall.