17 Aug 2017

Consumer confidence buoyant in August

5:57 pm on 17 August 2017

Consumer sentiment is holding around two-year highs on the back of a strong labour market, continued low inflation and interest rates.

23062016 Photo: RNZ / Rebekah Parsons-King. Busy streets in Wellington.

Photo: RNZ / Rebekah Parsons-King

The ANZ - Roy Morgan Consumer Confidence Index rose one point to 126.2 in August on the month before.

The survey showed consumers were slightly more upbeat about their personal finances and the near term outlook for the economy.

Respondents also expected inflation pressures to ease and house price growth to slow down.

ANZ chief economist Cameron Bagrie said consumers do not seem to be put off at the prospect of lower house prices.

"They're looking at the bigger picture, what's happening in the labour market, what's happening with regard to inflation and interest rates. Those things are dominating and so it's still happy times for consumers."

He said a slowing in the housing market would also help keep a lid on household debt and that in turn would help underpin strong consumer spending.

Mr Bagrie said increased spending from the government's budget in May, along with the prospect of more spending following the election, would also support confidence.

He said probably the greatest threat to the current upbeat mood would come from overseas.