Optimists ignore rate hike

By BRIAN FALLOW

Consumer sentiment went from optimistic to slightly more optimistic over the June quarter, despite a rise in interest rates.

The WestpacTrust McDermott Miller consumer confidence index rose to 121 from 120 in March. Any number over 100 indicates more optimists than pessimists.

"What is impressive is that consumer confidence appears undaunted by the three consecutive increases in interest rates from the Reserve Bank," said Westpac chief economist Adrian Orr.

Confidence was higher in the three main centres than among provincial and rural consumers, and continued the traditional pattern of being stronger among the young, the male and the better-paid.

"The strains of lower commodity prices and a rising kiwi dollar appear to be taking their toll on rural consumer confidence, albeit after a period of stellar growth," Orr said.

But employment growth, rising real wages and now rising house prices had put the spring back into the step of the urban consumer.

The proportion of respondents reporting they are better off than a year ago was unchanged, but the proportion saying they were worse off fell from 33 to 28 per cent.

A net 22 per cent expect better economic times for New Zealand over the next 12 months. This is down slightly from 23 per cent in March.

A net 28 per cent - unchanged from March - consider now a good time to buy a major household item.