Consumer confidence up amid rising house prices, improving jobs market

New Zealand consumers continued to get more optimistic this month as rising house prices and an improving labour market underpinned the rosier outlook.

The ANZ-Roy Morgan consumer confidence index rose 4.5 points to 123.7, with more respondents in the survey feeling better off financially than they did a year ago, the first positive reading since March 2008.

The current conditions index advanced 4 points to 123 and future conditions gained 5 points to 124.

"Lifting business confidence had earlier signalled the economy was picking up, but now the baton has been passed to the consumer," ANZ New Zealand chief economist Cameron Bagrie says in his report.

"The question is how durable a sentiment-led pick-up in consumer spending can be in the absence of an income generation backbone."

Government data this week showed retail sales grew 0.5 percent in the first three months of the year as a sweltering summer kept a lid on people's plans to buy new clothes ahead of winter.

The survey of 1028 people found a net 1 percent feel better off than a year ago, compared to a net 2 percent feeling worse off in April. A net 36 percent expect to be better off next year, up from 28 percent last month.

People were more upbeat about the economic outlook, with a net 12 percent more optimistic about the year ahead from 7 percent and a net 25 percent upbeat about the economy five years out, compared to 24 percent in April.

A net 44 percent of respondents said it is a good time to buy big-ticket items, up from 40 percent last month.

Government figures last month showed increasing discounting among retailers was one of the key ingredients in keeping the annual pace of inflation at 0.9 percent, just below the Reserve Bank's target band of between 1 percent and 3 percent.

Some 40 percent of major household appliances were discounted in the quarter, the biggest proportion, followed by audio-visual equipment with 36 percent marked down.

A third of carpets and other floor coverings, and glassware, tableware and household utensils were discounted, and 29 percent of women's clothing was reduced.

(BusinessDesk)