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Consumer confidence bounces back

Consumer confidence bounces back
Kiwis have renewed confidence in the economy and are showing more willingness to open their wallets despite offshore turbulence, a survey has found.

Kiwis have renewed confidence in the economy and are showing more willingness to open their wallets despite offshore turbulence, a survey has found.

This month’s ANZ-Roy Morgan Consumer Confidence measure rose 3.9 points to 113.3, its highest level since January and more than recovering from July's 3.1 point decrease.

The bank's head of market economics and strategy, Khoon Goh, said the results were pleasing given the uncertain economic backdrop overseas.

The survey was conducted between July 25 and August 7, during which time international headlines were "predominantly negative" – from drawn-out debate over the US debt ceiling, the Reserve Bank signalling interest rates were likely to rise soon, an escalation of the European debt crisis, world sharemarkets falling and the NZ dollar climbing to new highs before receding,

"Given such a backdrop, one would have expected consumer confidence to have taken a knock," he said.

"The fact that it managed to rise shows that New Zealand consumers are largely brushing off offshore woes, for now anyway."

He said such resilience suggested the labour market was improving.

Most importantly, there was a significant jump in those thinking that it is a good time to purchase a major household item, he said – the largest monthly increase in the history of the survey.

"The high NZD may be a factor but it may also indicate more willingness by consumers to loosen the purse strings."

Confidence was higher across all districts, with Wellington recording the largest rise – up 9 points – despite uncertainty over job prospects in the public sector and a housing market bucking the national improving trend.

Canterbury’s confidence measure, at 110.2, was the lowest across the regions.

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