Consumer confidence rebounds

Consumer confidence rebounded in the June quarter from the Christchurch earthquake-induced slump three months earlier, but the survey was carried out before Monday's big aftershocks smashed the city again.

The Westpac McDermott-Miller consumer confidence index, published today, rose to 112 in the latest period from 97.9 in the March quarter, with a reading above 100 indicating optimists outnumbered pessimists.

McDermott-Miller managing director Richard Miller said that when the survey was carried out between June 1 and 12, the index had recovered from the pessimistic dip caused by the February quake.

"Consumers are beginning to believe the worst of the recession is over and are indicating the interest in spending on household goods," Mr Miller said.

"It remains to be seen whether the third round of earthquakes will once again dent consumer confidence and forestall actual retail spending."

Westpac chief economist Dominick Stephens said household confidence had rebounded to more normal levels after being badly dented by the February earthquake.

Along with recent recoveries in business confidence and retail spending, today's consumer confidence survey was a sign the wider economy had weathered disruption from the Christchurch quake better than might have been feared in March.

While the survey showed conditions remained challenging for Cantabrians, regional optimism was being seen in Auckland and the dairy exporting regions.

"That said, we’re talking about a modest increase in spending off a very soft base, and confidence overall remains weaker than in mid-2010, before the economy slowed and the September Canterbury earthquake hit," Mr Stephens said.

The recovery in confidence in the June quarter was led by a rebound in households’ outlook for the economy over the year ahead, with a net 6.7 percent of households now expecting bad economic times over the next 12 months, down from 42.5 percent in March.

Other sub-categories of the index also improved.

On balance, 18.3 percent of respondents think their personal financial situation is worse than a year ago, down from 20.2 percent in March, and 9 percent think their personal situation will be better in a year’s time, up from 1.2 percent.

The net balance of households thinking that now is a good time to buy a major household item, rose from 12.5 percent to 26 percent.