Consumer confidence is at its highest level since before the first major earthquake in Christchurch nearly three years ago.
The Westpac : McDermott Miller Consumer Confidence Index rose 6 points to nearly 117 in June, the highest it has been since June 2010.
A figure above 100 indicates optimists outnumber pessimists.
Westpac said it appears economic optimism has surged, prices for many consumer goods have fallen, and sentiment in rural regions has recovered as the immediate impact of the drought fades, and is replaced by the prospect of higher dairy payouts.
The economic recovery appears to be rubbing off onto consumers.
Radio New Zealand's economics correspondent said that's good news for retailers.
But Westpac worries people are returning to their high-spending ways, particularly among older households and Aucklanders.
It notes the number of people saying they would rather spend than save a cash windfall is the highest since 2004.
People more inclined to spend
Westpac chief economist Dominick Stephens says people are shifting out of saving mode and back into spending mode.
He says rising house prices are one indication people are feeling more inclined to spend.
"The message that the economy is on the improve has gotten through. People are keen to get out there and spend, believing that their assets are worth more than they thought they were."
Mr Stephens says the Canterbury rebuild is also driving a lot of economic activity but warns rebuilding a city is a temporary phenomenon and there will be a downturn in the future.
