New Zealand consumer confidence was near a four-year high in the lead-up to the Christmas season, an all-important period for retailers.
The ANZ-Roy Morgan consumer confidence index increased 1 point to 129.4 in December, the highest level since January 2010. Seasonally adjusted, the measure was at its highest level since February 2007. A net 39 per cent of 1,063 people surveyed thought it was a good time to buy big ticket items, up from a net 33 per cent in November, auguring well for retailers who've been under margin squeezes as they battle for market share by discounting prices.
The current conditions index rose 2.4 points to 123.8, a six-year high, and the future conditions index edged up 0.1 of a point to 133.2.
"Both augur well for the Christmas shopping period and also the wider economy," ANZ New Zealand chief economist Cameron Bagrie said in his report. The survey is "telling us something about the economic expansion we're in: it has real legs and further to run."
Combined with business confidence surveys, today's report signals potential growth of 5 per cent or more, something Bagrie said looked like a stretch.
Reserve Bank governor Graeme Wheeler yesterday signalled a steeper track for interest rate hikes next year as the momentum in the economy stokes inflationary pressures, and will need him to lean against potential price rises.
Today's survey predicts consumer price inflation rising an annual 3.8 per cent over the next two years, up from 3.2 per cent in November. That's well ahead of the Reserve Bank's expectations for the CPI, which it sees increasing at a pace of about 1.5 per cent in 2014, edging up to 2 per cent the subsequent year.
Annual house prices are seen as increasing 4.4 per cent a year for the next two years, up from 4.2 per cent.
A net 9 per cent of respondents said they were better off financially now than they were a year ago, down from a net 10 per cent in November, and an unchanged net 37 per cent expect to be better off this time next year.
A net 27 per cent expect the economy to improve in the coming 12 months, unchanged from November, and a net 35 per cent see good economic times over the next five years, also unmoved.