Consumer confidence has lifted to its highest level for more
than a year, the Westpac McDermott Miller survey has found.
The quarterly survey's index rose 8.6 points to 111.1 - any
reading over 100 indicates more optimists than pessimists.
"The improvement was pervasive," Westpac economist Felix
Delbruck said. "Not only have households become more
optimistic for the future, but their assessment of their
current financial situation is the best it has been in five
A net 29 per cent of respondents said it was a good time to
buy a major household item. While that is only a modest
improvement on the September survey's 27 per cent, it is
still the second highest reading for this indicator since the
The lift in confidence adds to evidence, like electronic card
transactions, that the weak September quarter was a pothole,
rather than a ditch. It comes despite a stream of
high-profile layoffs and an unexpectedly steep rise in the
unemployment rate to 7.3 per cent.
"Then again, other developments have been more positive: the
Canterbury rebuild is accelerating, we've had slightly better
news on the global economy, and a continued high exchange
rate has helped keep prices for some imported goods low."
Respondents were asked whether they feel better or worse off
financially than a year ago. While a net 12 per cent say
worse off, that is an improvement on a net 22 per cent of
that view three months ago.
Households are now also cautiously optimistic about their
financial situation, with a net 8 per cent expecting things
to get better over the coming year, the highest since
September last year in the lead-up to the Rugby World Cup.
But households remain significantly less upbeat about their
When asked what they would do with a $10,000 windfall, the
proportion saying they would use it to pay down debt remains
higher than it was in the mid-2000s and the proportion who
say they would spend it correspondingly lower.
- Brian Fallow of the New Zealand Herald