Wallets empty as consumer confidence hits 7-year high

By JIM EAGLES


New Zealanders feeling that "this is about as good as it gets" have pushed consumer confidence to its highest level for seven years.

The Westpac-McDermott Miller Consumer Confidence Index for December, issued today, has now risen for five quarters in a row. It found that people feel better off than a year ago and are more confident that the economy will improve than at any time in the survey's 15-year history.

"The feeling of optimism is universal," said Richard Miller, managing director of McDermott Miller, and "the signs are consumer confidence will continue to rise in the next quarter".

The index is now at 126, compared with 123.3 in September and 119.4 a year ago, and the number of people who say they are better off financially than a year ago is the highest since 1988.

Those who think the economy will improve in the coming year rose to a net 24.1 per cent, up from 15.1 per cent previously.

The number of consumers considering this a good time to buy a major appliance jumped to a net 49 per cent, well up from the 39.9 per cent three months ago and the 24.1 per cent last December.

Mr Miller said this all pointed to a bumper Christmas shopping spree.

"Consumer sentiment influences consumer spending. A sustained rise in the Consumer Confidence Index indicates growing consumer optimism and propensity to spend," he said.

Metropolitan consumers were the keenest to buy, with 70 per cent of Aucklanders, 67 per cent of Wellingtonians and 68 per cent of Christchurch residents looking at major purchases.

Mr Miller said this was due to a combination of "cheaper imported products, competitive pricing by retailers and increased ability to finance purchases".