Consumer confidence hits pre-recession high

Christmas shoppers at Westfield Albany in Auckland. Photograph / Richard Robinson

New Zealand consumers are the most upbeat they've been since the double-dip recession which began before the 2008 global financial crisis, underpinning the prospects for strong economic growth this year.

The ANZ Roy Morgan consumer confidence index rose 6.4 points to 135.8, the highest level since January 2007. A net 50 per cent of the 1,737 people surveyed said now is a good time to buy a big ticket item, up from a net 39 per cent in December. The current conditions index rose 6.3 points to 130.1 and the future conditions index climbed 6.5 points to 139.7.

"We're left with an impression of elevated levels of consumer optimism," ANZ New Zealand chief economic Cameron Bagrie said in his report. "That's a good sign for some post-Christmas cheer across the retail sector now that the silly season and traditional bout of December euphoria has passed."

The upbeat survey is the latest in a series of reports showing New Zealand is likely to experience strong growth this year, and ANZ's Bagrie said if the growth indicators are correct, "the economy will surge in 2014" at a pace of about 3.5 per cent.

A net 11 per cent of respondents said they were financially better off now than a year ago compared to 9 per cent in December, and a net 41 per cent expect to better off in a year's time, up from 37 per cent.

A net 39 per cent of respondents anticipate better economic conditions over the coming year, up from 27 per cent in December, and a net 40 per cent predict continuous good times over the next five years, from a net 35 per cent.

Inflation expectations eased in the survey, with respondents expecting 3.3 per cent annual increases in prices over the next two years, compared to 3.8 per cent in December. House prices are expected to rise 4.2 per cent a year for the next two years, down from 4.4 per cent.