N.Z. Consumers More Pessimistic on Economy, Roy Morgan Says

By Tracy Withers

March 9 (Bloomberg) -- New Zealand consumers are more pessimistic about the outlook for the economy amid rising unemployment and a deepening recession, according to a survey conducted by Roy Morgan Research.

Sixty-three percent of the 1,072 people surveyed expect the economy will worsen over the next year, Melbourne-based Roy Morgan said in a report on its Web site. The reading rose from 60 percent in early February.

Reserve Bank Governor Alan Bollard has cut the official cash rate by 4.75 percentage points since July to help steer the economy out of a recession that began in the first quarter of last year. The government is cutting taxes and spending on schools and roads to generate jobs after the unemployment rate rose to a five-year high of 4.6 percent in the fourth quarter.

Forty six percent of consumers said it is a bad time to buy a major household item compared with 40 percent in early February. Roy Morgan’s composite confidence index fell to 95.9 from 100.4 a month earlier and the lowest since August.

The survey was conducted in the two weeks ended March 1 and has a sampling error of 1.4 percentage points.

To contact the reporter on this story: Tracy Withers in Wellington at twithers@bloomberg.net.