20 Dec 2011

Consumer confidence plunges

6:53 am on 20 December 2011

Consumer confidence has fallen sharply as households worry about the global outlook

The Westpac McDermott Miller consumer confidence index fell 11 points to 101 in the three months to December.

A result above 100 indicates there are more optimists than pessimists.

December's result is the lowest since immediately after the February earthquake and, before that, early 2009.

Overall, 22% of respondents expect bad times ahead for New Zealand in the coming year, compared with 2% in September.

Westpac chief economist Dominick Stephens told Evening Business on Checkpoint households have become a lot more concerned about the economic outlook.

"People are now telling us, whereas previously they were fairly sanguine, they're now concerned about this news coming out of Europe I think."

He says there is now an appreciation among consumers that it may eventually hit New Zealand.

Mr Stephens says such a pronounced drop in confidence signals consumer spending may fall early next year.

The survey polled more than 1,500 respondents during the first eleven days of December, and has a margin of error of 2.5 percent.