Nearly half of Kiwis plan to rein in their spending as a result of the Covid-19 crisis, the results of a new survey suggest.
As New Zealand enters a new phase in the fight against the pandemic and begins to adjust to life outside the lockdown, the virus's impact on the economy are becoming clearer.
A consumer spending survey carried out in the first week of Alert Level 3 found that 43 percent of respondent didn't feel confident enough to spend more money over the next three to six months, while 38 percent did plan to up their spending. Another 19 percent were neutral or did not know.
The survey, by economist Tony Alexander, also highlighted what Kiwis planned to spend their money on and suggests not all retailers or sectors will suffer in the months ahead.
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Alexander says a big driver of plans to spend more was the lockdown, with nearly 30 percent of spenders saying they wish to catch up on spending they were unable to do in Alert Level 4. "Reflecting the recent burger frenzy, 20 percent say they will be spending more on eating out," he says.
Of the spenders, the survey found a high 29.5 percent plan to buy property; 35.2 percent say they will be spending their money on home renovation and 20 percent say they will be spending more on their garden.
"Perhaps as a result of spending five weeks looking at their walls, [respondents] have decided the time is right to spruce up their house, change the wallpaper, knock out a wall, or create a home office," Alexander says.
Alexander says the survey results suggest that while the economic fallout from Covid-19 will cause an overall decline in household spending, home renovation retailers, hardware stores and garden centres will be relatively busy.
"The survey overall tells us that more people plan cutting their spending back than increasing it, but that there could be relative outperformance by retailers selling recreational goods, hardware, dine-in and takeaway food, and gardening supplies such as plants, tools, etc.
"The relatively high 30 percent who are planning to spend more citing property suggests that there are plenty of people hoping and planning to take advantage of the shift in residential real estate to being a buyers’ market."
