KEY POINTS:
Higher petrol prices and interest rates have barely dented consumer confidence, according to the latest Westpac McDermott Miller survey.
The quarterly survey's overall index slipped two points to 117.7 from 119.7 in December. Any reading over 100 represents more optimists than pessimists.
But the decline reverses only a quarter of the jump in confidence recorded in the previous survey and leaves confidence at a higher level than in the first nine months of last year, though lower than the first nine months of 2005.
The Reserve Bank would take little comfort from the poll, Westpac chief economist Brendan O'Donovan said.
At these levels consumer confidence was consistent with consumer spending growing 1 per cent in real terms in the current quarter, which would be stronger than the central bank was counting on, he said.
Since the December survey petrol prices have risen 13c a litre and the Reserve Bank has raised its official cash rate by a quarter of a percentage point on March 8.
"The timing of the survey [from March 1 to 18] means the increase in the OCR and petrol prices won't have been fully captured," O'Donovan said.
"But even so, confidence has remained remarkably resilient, suggesting other factors are at play."
The housing market, which was accelerating again, and strong growth in incomes, including the effects of the Working for Families programme, were likely to be the key offsets, he said.
Consumers who say they are better off than a year ago outnumber those who feel worse off, by a net 7.6 per cent.
And more consumers believe now is a good time to buy a big household item than did in December.
O'Donovan said that was likely to reflect the resurgent New Zealand dollar, which makes imported goods cheaper.
