New Zealand Consumers Most Confident in Five Quarters on Economy

New Zealand consumers are the most confident in five quarters as the cost of some products falls and the Christchurch rebuild gathers pace, a survey showed.

An index of sentiment rose to 111.1 in the fourth quarter from 102.5 in the three months through September, Westpac Banking Corp. (WBC) and McDermott Miller Ltd. said in a statement today. That’s the highest since the third quarter of 2011. The proportion of people saying it is a good time to buy a large household item was the highest in more than a year.

“Confidence has finally taken off,” said Westpac New Zealand Chief Economist Dominick Stephens. “The accelerating Canterbury rebuild, slightly better news on the global economy and low prices for some consumer goods carried the day.”

Improving confidence may bolster New Zealand’s economic recovery as the central bank holds interest rates at a record low. Fourteen of 16 economists surveyed last week by Bloomberg News forecast central bank Governor Graeme Wheeler will leave borrowing costs unchanged until at least July.

Still, a net 12 percent of consumers said their financial situation has deteriorated, the lowest since late 2007, Westpac said. The net figure subtracts pessimists from optimists.

A net 6 percent expect the wider economy will slow over the next 12 months, the lowest reading in five quarters. A net 29 percent said it was a good time to buy a major item.

The survey was conducted Dec. 1-10 with 1,577 consumers interviewed. The margin of error is 2.5 percent, according to Westpac.

To contact the reporter on this story: Tracy Withers in Wellington at twithers@bloomberg.net

To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net

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