Relief for retailers as confidence takes off
Consumers are the most upbeat about their present finances than they have been for five years, and more people are saying it is a good time to buy a big household item.
In a positive sign for retailers, consumer confidence is finally taking off, after being "disappointingly earthbound" for the past year, according to a survey.
The Westpac McDermott Miller consumer confidence index rose to 111.1, up from 102.5 in September. A number above 100 indicates optimists outnumber pessimists.
The survey added weight to Westpac's expectation that consumer spending should improve in the December quarter after a dip in the September quarter.
Confidence appears to be getting a lift from the Canterbury rebuild, a less gloomy global outlook and a high New Zealand dollar keeping prices low for some imports, despite unemployment recently rising to 7.3 per cent.
But people are still less upbeat than they were before the 2008 recession hit.
A net 12 per cent said they were worse off financially than a year ago, but that was far less gloomy than the net 22 per cent feeling worse off three months ago.
The latest result was the least downbeat consumers have been since the end of 2007, just before recession hit.
Westpac senior economist Felix Delbruck 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."
The willingness to buy a big household item like a television was the highest seen in a December survey since the mid-2000s "which will be welcome news to retailers ahead of Christmas".
A net 29 per cent of those surveyed said it was a good time to buy a big-ticket item, up from a net 27 per cent last time.
Official Statistics New Zealand figures for electronic sales in October showed core retail sales up 1 per cent for the month, the biggest monthly gain since the start of the year.
The Dominion Post