16 Jun 2011

Surveys show rising consumer confidence

11:59 am on 16 June 2011

Two surveys have found consumer confidence is rising.

The Westpac-McDermott Miller consumer confidence index rose 14 points to 112 in the previous three months.

A reading above 100 indicates more optimists than pessimists.

And an ANZ-Roy Morgan survey released on Wednesday found an expected lift in rural incomes had boosted sentiment, though that's yet to translate into higher spending as households have concentrated on repaying debt.

Westpac senior economist Felix Delbruck says fewer people are downbeat about both their current financial position and the economy's prospects over the next year.

Mr Delbruck says the survey was conducted before Monday's strong tremors in Christchurch, which are likely to trigger a dip in confidence in the region.

The ANZ-Roy Morgan monthly index of sentiment stood at 112.5 in June, an increase of 9 points from the previous month. A reading above 100 shows optimism, and a reading below indicates pessimism.

The index is now back to levels seen before the 22 February quake in Christchurch.

ANZ head of market economics Khoon Goh says respondents outside the major urban area felt most confident, though many remain downbeat about the economy and their own financial position right now.

Mr Goh says two-year inflation expectations fell back to 3.2% due to falling fuel costs, while expectations of rising house prices rose slightly indicating the spending rebound is likely to be capped.