Consumer confidence bounces

Auckland is the region most optimistic about the NZ economy. Photo / Sarah Ivey

Consumer confidence has rebounded in the latest quarterly Westpac McDermott Miller survey, fully reversing the plunge which followed the February earthquake.

The latest survey was completed the day before Monday's severe aftershocks.

The index rose 14 points to 112. Any level over 100 indicates more optimism than pessimism. Respondents are more positive about future conditions than present ones.

A net 7 per cent still expect bad economic times over the next 12 months, but that contrasts with a net 47 per cent expecting worse times in the March survey.

The main reasons given by consumers who expect good economic times over the next 12 months are that the downturn will have less impact (23 per cent), effective economic policies and tax cuts (15 per cent), and better export prospects (14 per cent), McDermott Miller managing director Richard Miller said.

"These views are widespread, but especially strong amongst the secondary centres and rural areas, where the benefits of higher earnings from agricultural products are expected," he said.

A net 18 per cent think their personal situation is worse than a year ago, where a net 20 per cent did in March, and a net 9 per cent expect it to be better in a year's time, up from 1 per cent in the last survey.

"Households' assessment of their own financial situation has tended to be a better guide to spending behaviour than general economic confidence, but at the moment both are pointing to a modest pickup in spending in the first half of this year," Westpac economist Felix Delbruck said.

There was also a jump in the net balance of people who consider it a good time to buy a major appliance, to 26 per cent from 13 per cent last time.

People in Southland, Waikato and Taranaki were by far the most positive about prospects for their own region.

"This buoyant regional outlook in dairy producing regions is clearly a reflection of strong prices and strong growing conditions, but may also be a sign that farmers are finally beginning to spend in the High Street," Delbruck said.

Aucklanders' confidence about their own region posted a big rebound but in Canterbury a net 22 per cent expect bad times for the region over the year ahead.

Auckland is the most optimistic about the national economy over the coming year, with its index up to 126.8 from 101.6 in March.

Delbruck said the survey would not challenge the Reserve Bank's view in last week's monetary policy statement that the impact of the February earthquake on confidence outside Christchurch had been limited or that consumption had grown modestly over the first half of the year.