Consumer confidence edges down
Consumer confidence is edging down, possibly reflecting the impact of falling dairy prices on smaller centres and rural areas, a bank survey says.
The Westpac McDermott Miller June-quarter survey shows confidence at 121.2 points, down 0.5 from the March-quarter survey.
Westpac said the economy had been more of a mixed bag in recent months, after a period when all the news was good.
The building boom was continuing, but there had been a more than 20 per cent drop in global dairy prices, the Reserve Bank had moved the interest rate up three times since March, and the housing market was also sluggish.
"In view of all this it is perhaps surprising that consumer confidence hasn't fallen more," Westpac senior economist Felix Delbruck said.
Consumer optimism had come off the boil in smaller centres and in rural areas where the fall in dairy prices was important.
But overall consumer confidence remained "extremely high" and there was little sign that households' spending appetites had cooled.
The survey showed little impact from rising interest rates so far, perhaps because borrowers have had the chance to fix their mortgage rates at favourable rates.
For the third survey in a row there was a rise in the number of households saying it was a good time to spend on big-ticket items.
A net 31.5 per cent of those surveyed said it was a good time to buy a major household item, up 3 percentage points from the net 28.3 per cent in March. The present level is above the historical average, but below the peaks seen a decade ago.
There seemed to be continued "bargain-hunting" by consumers, with the continued draw of cheap imported goods.
But the number of respondents saying they had increased their spending on eating out and entertainment had declined in the latest survey.
Despite rising interest rates, and a less "stellar" economic outlook there was no greater desire to pay down debt. In fact, the numbers saying they would use a windfall to pay off debt was at a 15-year low, Westpac said.