KEY POINTS:
Consumer confidence seems to have become as volatile as financial markets with the Westpac McDermott Miller Index of confidence staging a record rebound out of a slump.
The rebound of the index to 104.8 in the September quarter from 81.7 in the June quarter was an unprecedented lift of 23 index points in a quarter. The June index was a 17-year low.
An index number over 100 indicates there are more optimists than pessimists. The survey was conducted between September 1 and September 15.
"Consumers are back from the brink," said Westpac senior economist Donna Purdue.
"A combination of lower fuel prices, the Reserve Bank of New Zealand's surprise cut in the official cash rate in July - the first cut in five years, and pending tax cuts have all seen a collective sigh of relief from cash-constrained households," she said.
The biggest driver of the lift in confidence this quarter was from consumers' view of the economy.
"On net, 17 per cent of consumers still think that we will face bad economic times over the coming year, but that reflects a spectacular improvement from the net 52 per cent expecting bad economic times in June," said Mrs Purdue.
Consumers are far more upbeat about medium term prospects for the economy and their own personal prospects.
"From a retail perspective, the fact that consumers expect to be better off next year is good news," Mrs Purdue said. "And even better news is that consumers' assessment of whether now is a good or bad time to buy a major household item improved substantially from June."
A net 13.9 per cent of respondents think now is a good time to buy, up from a net 10.8 per cent thinking it was a bad time to buy in June.
Mrs Purdue said that the level of consumer confidence was significantly higher than what would be consistent with the RBNZ's rather dire view of consumer spending in the September Monetary Policy Statement.
The survey predates some of the events in global financial markets.
- NZPA
