Consumer confidence keeps bubbling along

By BRIAN FALLOW


Consumers are more confident than they were three months ago, buoyed by wage rises, job security and a rise in house prices.

The Westpac McDermott Miller consumer confidence index has bounced back to 125 for the September quarter, after slipping to 121.7 in the June quarter. The rise has returned it to the levels it held during the booming mid-1990s.

Respondents were more positive than in June when asked whether they are better off than a year ago, and whether they expect better or worse economic times over the next year and the next five years.


But an index reflecting their answers to forward-looking questions remained lower than one reflecting the answers to questions about the here and now, which is a pointer to a slowdown in activity.

Westpac economist Nick Tuffley said: "Obviously, the tight labour market, bringing with it job security and higher wages, is providing consumers with plenty of cheer.

"Also we should not discount the effect recent house price rises may have had."

House prices rose 22 per cent in the June year.

Tuffley said confidence was strong throughout the economy, with rural regions the leading the way.

"Higher prices for many agricultural products despite the high New Zealand dollar will give farming communities the confidence that profits can still be made when the dollar is high."