Confidence holds steady in survey

By BRIAN FALLOW economics editor

Consumer confidence held steady in the latest WestpacTrust/McDermott Miller quarterly survey.

The index fell marginally to 116 from 117 in June. Any level above 100 represents more optimists than pessimists.

But about 400 of the 1500 responses came in the week of the attack on the World Trade Center and were more pessimistic, even though at that stage people had had little time to do more than register the shock, not ponder its consequences, WestpacTrust chief economist Adrian Orr said.

New Zealand was better placed than most countries to weather the international downturn, but domestic confidence would still be tested, he said.

Employment has risen 3.2 per cent over the past year and real wages are on the rise, boosting consumers' spending power.

"Interest rates have also declined, assisting with households' debt burden, while the residential property market has experienced some price growth," he said.

But with key export markets in recession, the best is over for the export sector [including tourism]. New Zealand's attractions and a super-competitive exchange rate would not bring tourists here if they were afraid to get in a plane - or there was no plane to get in, he said.

Auckland was the most confident region after Southland, and 18 to 29-year-olds the most optimistic.

Of the five questions of the survey, the only one to record improved confidence was "Do you expect to be better or worse off financially in a year's time?" with a net 20.7 per cent expecting to be better off, compared with 17.5 per cent in the June survey.

By contrast only 8.4 per cent expected New Zealand to be enjoying better economic times a year from now, down from 14.8 per cent three months ago.