In a positive sign for retailers, consumer confidence is finally taking off, after being disappointingly earthbound for the past year, according to a Westpac McDermott Miller survey.
Confidence appears to be getting a lift from the Canterbury rebuild, a less gloomy global outlook and low prices for some goods, despite unemployment recently rising to 7.3 per cent.
But people are still less upbeat than they were before the 2008 recession hit.
The Westpac McDermott Miller consumer confidence index rose to 111.1, up from 102.5 in June. A number above 100 indicates optimists outnumber pessimists.
Westpac Senior Economist Felix Delbrück said: “Consumers have become more optimistic for the future and more positive about the present. In fact, this is the most upbeat they’ve been about the current state of their finances in five years.”
“A lift in confidence wasn’t guaranteed given the recent reports of job losses and rising unemployment,” he said.
“We suspect more positive developments – the accelerating Canterbury rebuild, slightly better news on the global economy, and low prices for some consumer goods – carried the day.’’
Low interest rates and a strengthening housing market may also have helped - there was a notable lift in sentiment among Aucklanders.
“We’re still a fair way away from the heady days of the mid-2000s,” said Delbrück.
“Households continue to be less upbeat about their finances than they were before the 2008/2009 recession, and their attitudes towards spending and debt repayment remain relatively cautious. Still, this is a change from recent trends that will be welcome news to retailers.”
The survey was conducted over 1-10 December, with a sample size of 1577.