Households remain in good spirits, prepared to spend on leisure activities and unconcerned about paying down debt, the Westpac McDermott Miller consumer confidence September survey shows.
The index fell one point in September to 112.4, following gains in the past year. Confidence still remained at firm levels, Westpac chief economist Dominick Stephens said.
Large numbers of households were reporting their financial position had improved. Although expectations for the coming year had softened, households remained ''fairly upbeat'' about the economic outlook.
Households remained in the mood to spend. However, there was some change in what they were buying, he said.
''Spending on entertainment and leisure activities is up. At the same time, demand for durable items, like household furnishings, has softened. This is likely to be related to the slow down in the housing market over the year.''
Households would often purchase new furnishings when moving home but house sales had fallen more than 20% in recent months and house sale price growth had stalled, Mr Stephens said.
Paying down debt did not appear to be a major concern for households in the three months ended September.
Each quarter, households were asked what they would do if they received a windfall of $10,000.
The number of households who said they would use the funds for savings or paying down debt had been hovering at low levels for some time, he said.
Household debt levels had continue to rise in recent years.
''This will be an important area to watch over the coming year with regards both to household confidence and spending.''
Relative to disposable incomes, debt levels were at record highs and much of the debt was leveraged against housing assets.
With the housing market slowing, it could have an important impact on the financial health of households in coming years, Mr Stephens said.
The survey showed less than 50% of those surveyed would use a cash windfall to save or pay off debt, compared with nearly 70% in 2002.
The survey was taken from September 1 to 10, before the aviation fuel shortage caused by a digger damaging the Marsden Point to Wiri line on Monday.
The shortage of fuel has caused airlines to cancel flights.
