Confidence edges higher

Kiwi consumers remain more prudent with spending than before the global financial crisis, says ANZ. Photo / Paul Taylor

Improving labour market and high dollar driving positive mood of consumers

Consumer confidence has held up at historically high levels in this month's ANZ Roy Morgan survey.

The survey's headline index at 133 was up one point on June and sits just three points below the seven-year high it reached at the start of the year.

Such resilience in an environment where interest rates have moved up and are projected to rise further, and where the housing market has plateaued testified to wider influences on sentiment like the labour market picking up and the boost to spending power from a strong New Zealand dollar, said ANZ chief economist Cameron Bagrie.

A net 9 per cent of respondents say they are better off financially than a year ago.

"That's down a tad [from a net 13 per cent last month] but we are not reading too much into it," Bagrie said.

That indicator has been on a rising trend for the past three years though it's shy of the levels seen during the mid-2000s boom.

A net 40 per cent expect to be better off financially in a year's time, up from a net 34 per cent in June, and a net 44 per cent consider it a good time to buy a major household item, up two points from June.

Confidence in the economic outlook remains steady, with a net 34 per cent expecting better times over the year ahead and a net 38 per cent positive about the next five years.

"Despite still-elevated levels of confidence we are not seeing across-the-board spending largesse. Consumers remain more prudent than they were prior to the global financial crisis," Bagrie said.

"We take the aggregate signal from robust levels of confidence as being one of an economy and consumer chugging along."

The two most confident regions are Auckland and the rest of the North Island excluding Wellington, both of which have risen to the highest level in six months.

Confidence in Canterbury and the remainder of the South Island dropped to eight- and seven-month lows respectively.

Wellington, which hit a seven-year high last month, dropped back to the middle of the pack.

Meanwhile, ANZ's monitoring of job advertisements, across newspapers and internet sites, recorded a 5.7 per cent rise last month, seasonally adjusted.

Though most of that just reversed a 4.8 per cent drop in May it was enough to lift total advertising to its highest level since October 2008, said ANZ economist Steve Edwards.

"The lift in job advertising is consistent with a continuing but more modest rise in employment growth," Edwards said. "We expect the unemployment rate to edge down towards 5.5 per cent by year's end [from 6 per cent now]."