Consumers set for spending spree

By Joe Helm


Consumers are growing in confidence and are keen to go shopping, according to the latest WestpacTrust McDermott Miller survey of consumer confidence.

The survey shows consumer confidence continued to grow in the March quarter, the second consecutive optimistic quarterly reading following the pessimism that prevailed in the middle of last year.

The index rose 8.2 points to 116.3 in March after rising 9.6 points to 108.1 in December. The index is 13.4 points above a year ago.

A measure of more than 100 indicates more optimists than pessimists while a number below 100 shows the opposite.

WestpacTrust chief economist Bevan Graham said "consumer confidence continued to grow in the March quarter as it became clear the economy emerged from recession in the second half of 1998. This also coincided with the bottoming out of the decline in both the number of sales and prices in the residential property market".

A net 7 per cent of respondents now expect good times over the next 12 months, a significant turnaround from the net 23 per cent expecting bad times in the December survey.

The confidence is spread over all regions, both sexes and almost all socio-economic groups.

For the first time since June 1997 all regions are back to net confidence.
The increase in confidence was highest in the metropolitan areas, reflecting respondents benefiting from low interest rates.

Confidence in rural and secondary areas is steady reflecting the impact of drought and low commodity prices.

Almost all socio-economic groups, including the usually pessimistic over 50s and lower income groups, are now optimistic.

Women, pessimists for the past two years, now share the optimism of men.
Only those out of work remain pessimistic.

Richard Miller, managing director of strategic management consultant McDermott Miller, said "optimistic consumers make ready and willing shoppers. The majority of respondents believe that now is a good time to buy major household appliances. Low interest rates and sales are key reasons for that view."