Consumer confidence remains high

Consumer confidence remains near nine-year highs in New Zealand, with a slight drop in June due mainly to a drop in economic optimism in smaller centres and rural areas.

The fall in confidence is consistent with a recent fall in dairy prices, Westpac economist Felix Delbruck says.

The Westpac McDermott Miller consumer confidence index stands at 121.2 points in June, down -0.5 from March.

New Zealand economic news had been more mixed in the past three months.

The construction boom had continued but there had been a more than 20% drop in global dairy prices, the Reserve Bank was raising interest rates and the housing market had been sluggish.

''In view of all this, it's perhaps surprising consumer confidence hasn't fallen more. Overall consumer confidence remains extremely high and today's survey gives little sense households' spending appetites have cooled,'' Mr Delbruck said.

Otago Chamber of Commerce chief executive John Christie said national consumer confidence figures were mirrored in the South with a ''booming'' Central Otago-Lakes district offset by slightly less confidence in Dunedin because of the dairy price fall and other factors associated with servicing the rural economy.

However, Dunedin had a role to play in providing infrastructure for the province through Port of Otago being a major transport hub, and tertiary institutions providing growth.

''I suspect a displacement from Christchurch helping confidence in Queenstown and the Lakes district with average spending up and house prices remaining high.

''Right across the region, the tourism market is coming back strongly. We are seeing the return of traditional markets to the South and the strong growth from China looks good for us in the next season.''

The Otago chamber expected there to be a lot of activity in spring, Mr Christie said.

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