Economic growth has 'real legs'

JAMES WEIR
Last updated 13:33 14/12/2013

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In a good sign for shop tills this Christmas, consumers are in a "buoyant" mood and high confidence suggests the economy could grow more than 5 per cent next year, according to a bank survey.

The ANZ-Roy Morgan survey shows consumer confidence has edged up 1 point to 129.4 points this month, its highest level since the start of 2010.

The present levels of consumer and business confidence suggest the economy is booming and the potential for economic growth to hit 5 per cent next year.

"That looks a stretch to us but it is telling us something about the economic expansion we're in: it has real legs and further to run," ANZ chief economist Cameron Bagrie said.

While ANZ said the economy was not actually booming yet "we like the strong signal".

"Solid confidence is adding to the economic hum," ANZ said.

The composite measure of consumer and business confidence from the bank's surveys is now at its highest levels since the mid-90s.

The official economic growth figures for the September quarter are due next week. They were expected to confirm the strong levels of confidence seen for months, ANZ said.

Regionally, confidence in Wellington jumped 9 points to 131.4, hitting a four-year high.

Sentiment in Christchurch is also up 6 points to 132.5 and a six- month high. Auckland remained the most confident region at 132.8 points, up another two points.

And it is not just the onset of summer and holiday season that has made people more confident. ANZ said its seasonally adjusted estimates showed an improvement, with overall confidence at 129.8, its highest level since February 2007.

In an encouraging sign for retailers selling goods such as furniture, electronics and appliances, a net 39 per cent of consumers said it was a good time to buy a major household item. That was a four- month high after a run of falls.

The survey's current conditions index hit a six-year high and future conditions were at a 3 1/2-year high - both seen as good signs for Christmas shopping and the wider economy.

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- The Dominion Post

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