New Zealand: Optimism among consumers bounces back in Q3
September 17, 2012
Consumer confidence recovered modestly in the third quarter, as households are less concerned about future economic prospects and reported rising willingness to spend. The Westpac-McDermott Miller consumer confidence indicator rose to 102.5 points in the third quarter, which represents and improvement over the 99.9 points reported in the second quarter. As a result, the index returned to optimistic territory after slipping below the 100-point threshold, which means that pessimists now outnumber optimists. The improvement in the third quarter reflected consumers' optimistic assessment about present economic conditions and an increase in households' evaluation of economic prospects in the next 12 months. However, according to the survey, "the overall trend remains weak", as consumers reported that they feel financially worse off than three months ago. Nonetheless, despite the households' downbeat assessment regarding their own financial standing, a majority of respondents continue to consider that it is a good time to buy big-ticket items, reflecting healthy purchasing power as a result of the current low-inflationary environment.
Author: Ricardo Aceves, Senior Economist