Consumer confidence highest since beginning of recession, survey shows

The NZ Roy Morgan Consumer Confidence Survey rose to its highest level in early September since March 2008, which was the first quarter in which New Zealand entered recession. Predictions are for the New Zealand economy to exit recession in the September quarter this year, although subsequent growth is set to be subdued into 2010 as the unemployment rate keeps rising to above 7%. The Reserve Bank said earlier this year that it expects to keep the Official Cash Rate at or below its record low of 2.5% until the latter part of 2010, although some economists are sceptical about whether it can keep this pledge as the economy recovers. The twice monthly survey saw its latest rating at 114.5, up from 112.3 in mid-August and 114.1 at the beginning of August. This compared to 107.3 in early September 2008 after the rating had hit a low of 82 at the start of July 2008. Of the respondents to the survey, 43% said they thought now was a good time to buy major household items, which was up 6% from the previous survey. This compared to 40% who thought it was a bad time to buy major household items, down 3% from mid-August. This result was a strong indicator that consumer spending in New Zealand may have reached a bottom from which it can resume growing, Roy Morgan researchers said.