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Consumer confidence creeps up

Thursday 19th August 2010

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New Zealand consumer confidence edged up this month though fewer people feel better off, suggesting kiwis are still feeling cautious about spending.

The ANZ-Roy Morgan Consumer Confidence survey rose 0.7 point to 116.3 in August, holding below its long-term average level of 119.4. The current conditions index was little changed at 103.7 from 104 while the future conditions index rose to 124.7 from 123.4.

Consumers have reason to be hesitant, after the jobless rate rose to a 10-year-high of 6.8% and growth in retail spending, measured by credit and debit cards, stalled last month.  Economists expect the central bank will take a gentler track in raising interest rates given the tepid pace of economic growth.

More people deemed it a good time to buy a major household item, with the measure rising to a net 25% from a net 22% last month. The 3-point increase reverses the previous month’s decline though it “does signal there is still demand out there,” ANZ and Roy Morgan said in the statement.

“We remain unsure over how much influence the GST increase from 1 October is having on the responses to this question.

“There will no doubt be more ‘beat the GST rise’ type activity next month.”

The portion of people saying they feel better off than a year ago fell to 24% from 27%, for a net balance of -18%.

Still, people are upbeat about the outlook with a net 7% see better times in the next 12 months, up from a net 3% in the previous month’s survey.

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