Consumer confidence has jumped to a four year high in the September quarter, according to the latest Westpac McDermott Miller Consumer Confidence Index.
The dominant influence on the rise was a "sharp turnaround" in respondents' short term outlook for the economy, Westpac said.
Its index jumped 14.3 points from June to 120.3 in September. An index number of 100 indicates more optimists than pessimists, while a number under 100 indicates more pessimists than optimists. The result was predicted by the twice-monthly Roy Morgan consumer confidence survey.
The index was last this high in March 2005 (126.7).
"This is the second consecutive quarter that confidence has recorded a double digit gain - in the June 2009 quarter confidence lifted 10 points from 96 to 106," said Westpac senior economist Donna Purdue said.
"However, back then consumers appeared to lack conviction that a recovery was on its way. Now, there is no doubt. Consumers, regardless of age, income group, gender, or region, are convinced that better times lie ahead," Purdue said.
All of the survey components recorded increases this quarter. But the dominant influence was a sharp turnaround in the short term outlook for the economy, she said.
A net 17 per cent of consumers now expect good economic times over the coming year, up a massive 46 points from the June survey when a net 29 per cent expected bad economic times.
This is the second biggest quarterly improvement recorded for this component (the biggest being a rise of 56 points in the December 2000 quarter), and is the highest response since the March 2005 quarter.
A more upbeat global economic outlook and increasing talk that the NZ recession had ended will no doubt have fed these improved expectations. Domestically, rising house prices and signs that the labour market has held up better than expected will also have been influential factors.
The other major mover this quarter was consumers' assessment of their financial position in a year's time. A net 24 per cent of consumers are anticipating that the next year will be more lucrative - a seven year high for this series, and up from a net 13 per cent in the June quarter.
Perceptions around the long term economic outlook continue to reach new highs, though the gains are "far less spectacular" than for the short term outlook, said Purdue.
Still, an overwhelming net 63 per cent of respondents think there will be good economic times in the next five years."
INTEREST.CO.NZ
