Buoyant Kiwis heading for booming New Year

By JIM EAGLES

New Zealanders are heading into the festive season bubbling with economic confidence and determined to keep the good times rolling in the New Year, say a series of consumer surveys released today.

The largest of the surveys, conducted by ACNielsen, found Kiwis to be the most economically optimistic folk in the Asia-Pacific region and the most likely to spend up large in the next few months.

That sunny picture is endorsed by the findings of other surveys:

* The Westpac McDermott Miller Consumer Confidence Index for the December quarter remains extremely positive and optimism about the New Zealand economy next year has risen.

* The bi-monthly Rabobank of farmer confidence shows optimism is on the increase again after a drop in the face of declining export returns.

* The Auckland Chamber of Commerce's quarterly survey of its members shows business confidence in Auckland is high and getting higher.

This has been a record year for retail spending - for instance, the $1.24 billion pumped through Paymark's Eftpos system in the first two weeks of this month was up 10 per cent on the same period last year - and ACNielsen's survey of 9800 consumers in the Asia-Pacific region shows why.

While respondents in countries such as China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand signalled that they were cutting back on spending, New Zealanders and, to a lesser extent, Australians said the opposite.

"New Zealanders are less concerned about the prospect of a worsening economy than others in the region," said Jocelyn Hong, group marketing director for ACNielsen New Zealand, "and we have generally not deferred making investments or major purchases.

"What's more, we expect to continue on the same path: we're more intent on spending on cars, houses, desktop PCs, DVD players and holidays than any of our neighbours."

The survey shows that the driving force behind these big-spending plans is that New Zealanders are hugely optimistic about the future.

Half of those surveyed have no concerns about global economic recession, an even more positive result than in the two previous surveys, and the most positive of the 13 countries involved.

A mere 11 per cent of Kiwis and 10 per cent of Australians have fears about a worsening economy, the lowest in the survey.

Only 20 per cent of New Zealanders are worried about job security, compared with 39 per cent in India, 38 per cent in Hong Kong and 37 per cent in Korea.

Unlike most of the countries surveyed, few New Zealanders have any plans to put their money in stocks or shares. Only 12 per cent have any such investment plans compared with 26 per cent of Taiwanese and 25 per cent of Australians.

Instead, New Zealanders are looking to keep the retail boom rolling with the most optimistic shopping plans in the region.

Over the next six months 28 per cent plan to buy digital cameras, 26 per cent are thinking about a new car, 26 per cent want a new DVD, 27 per cent intend taking an extended holiday and 21 per cent plan to acquire property, more than in any other country.

While respondents in the rest of the region say they have cut back on going out, eating out, seeing movies, taking taxis, or buying luxury items, New Zealanders want the good times to roll on. In all of those areas Kiwis are first or second in their reluctance to cut back.

About the only pessimistic sign in the survey is that following the Bali bombing New Zealanders and Australians are the most nervous in the region about terrorist attacks. On the other hand, worries about crime have halved since the previous survey.

The same air of confidence was picked up in the quarterly Westpac McDermott Miller Consumer Confidence Survey based on 1587 interviews.

The consumer confidence index for the December quarter - in which anything over 100 shows there are more optimists than pessimists - was 119.4, virtually unchanged from the previous quarter.

The number of respondents saying they were better off financially than a year ago was up slightly (to 30.8 per cent).

But those expecting New Zealand to enjoy good economic times over the next 12 months outnumbered the pessimists two to one (by 42.1 per cent to 20.5 per cent), and those expecting the economic good times to continue over the next five years outnumbered the pessimists nearly three to one (42.9 per cent to 14.7 per cent).

Not surprisingly, given the optimistic out-look, the number thinking this would be a good time to buy a major household item was up (to 47.8 per cent).

"New Zealand consumers feel this is the place to be, and with good reason," commented Westpac's chief economist Adrian Orr.

"The domestic economy has been singing over the past 12 months, with employment and wage growth, and rising household wealth, all in tune.

"And the indications are that these factors will continue to remain supportive of solid consumer spending for the first quarter of 2003."

Otago was the most positive region in the survey (with an index rating of 128.9) closely followed by Auckland (125.1). The least optimistic consumers were in Taranaki and Manawatu, which have been hit by the drop in farm incomes caused by a higher dollar and slower commodity prices.

However, even that could change, to judge from the result of the Rabobank Rural Confidence Survey, which shows a sharp fall in farmer pessimism.

Forty-two per cent of farmers now expect the rural economy will get worse in the next year, falling from 64 per cent in October, says the bi-monthly poll.

The improved morale appears to be based on a recent upturn in commodity prices and expectations that interest rates will fall.

"Seventy per cent of all farmers now expect interest rates to decrease or stay the same," said Rabobank New Zealand managing director Bryan Inch.

"Farmers are looking for stability in debt servicing costs that will allow them to plan ahead with confidence."