Satish Ranchhod: Westpac senior economist on consumer confidence declining

Global uncertainty and domestic cost-of-living pressures are hitting collective consumer confidence hard, according to new data.

The Westpac McDermott Miller Consumer Confidence Index for the March quarter fell eight points to 89.2.

Anything below 100 indicates a pessimistic view.

Westpac senior economist Satish Ranchhod says confidence will likely trend upward as the year continues, but it'll be a gradual recovery. 

"If we look to the rest of this year, we are going to see confidence and economic activity continuing to climb. We've had some big interest rate reductions and we haven't felt the full impact of that yet."

LISTEN ABOVE

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
Westpac, in its latest consumer confidence survey, has found that
we're down eight points this month to eighty nine point two.
A number over one hundred is positive, so we're a
bit off that Wellington in the Doldrums South Island is
particularly south of the South, looking quite good. A lot
rosier there. Westpac senior economist Statis Ranchot is with me tonight,

(00:22):
good evening.

Speaker 2 (00:23):
Hey Ryan, how are yeah? Good?

Speaker 1 (00:24):
Thank you? So this is what do you put it
down to global factors the ongoing cost of living feeling.

Speaker 2 (00:31):
I think both of those factors are raising a lot
of concerns for household right now. The global outlook has
become just so much more on certain just over the
past couple of weeks, and many households are still dealing
with the impact of big consumer price raises over the
last couple of years.

Speaker 1 (00:46):
We were coming out of it though, when we were
on the up, and this is a setback in our confidence,
isn't it.

Speaker 2 (00:52):
Confidence has taken a little bit of a step down
after it's been trending high for the past year. I
think if we look to the rest of this year,
we are going to see confidence and economic activity continuing
to climb. We've had some big interest rate reductions and
we haven't felt the full impact of that yet. But
as people roll into last six mortgage rates, I think
we'll see a gradual recovery. But the key thing here
is it will be a gradual recovery in the economy.

Speaker 1 (01:15):
Do you think does this survey indicate that it might
take longer than we otherwise thought it would have.

Speaker 2 (01:21):
I think we weren't expecting to see things turning around
too quickly. It takes a while for those interest rate
cuts to flow through. Since most of us fix our
mortgages for one to two years, we're really going to
see a lot of households rolling onto laur rates in
the second part of the year, and that's when we'd
expect to see things really turning around.

Speaker 1 (01:38):
All right, doesn't sound like you're panicking. That's good to hear,
Statista Ranchod with us wes PAC Senior Economists. For more
from Heather Duplessy Allen Drive, listen live to news talks.
It'd be from four pm weekdays, or follow the podcast
on iHeartRadio.