- The Westpac-McDermott Miller Consumer Confidence Survey rises 1.9 points to 107.1 in Q2 of 2021.
- The survey showed that the consumer confidence is improving and is on a recovery mode.
- Households were now spending more on entertainment activities.
The Westpac-McDermott Miller Consumer Confidence Index rose 1.9 points to reach 107.1 in the June quarter, recovering from a major dip seen in 2020 due to the COVID-19 pandemic. The index had fallen 7 points to 97.2 points in the survey for June 2020.
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The Westpac-McDermott Miller Consumer Confidence Survey is conducted on a quarterly basis by the Research unit of McDermott. The Consumer Confidence Index is based on 5 internationally consistent questions, answered by a random sample of at least 1,550 Kiwis. This survey was conducted over 1-12 June 2021, with a sample size of 1,555.
Consumer confidence is summarised in a single index statistic obtained from responses to five questions. A score of 100 or above indicates that you are more optimistic than pessimistic. A score of less than 100 indicates that you are more pessimistic than optimistic. The range indicates how strong these sentiments are.
Recovery in consumer sentiment and economy
Westpac’s Acting Chief Economist Michael Gordon stated that the survey revealed that consumer confidence was rising and had recovered from most of the decline witnessed due to COVID-19-related shutdowns in 2020.
He also added that the economy was gaining traction as evident from the remarkable 1.6% jump in GDP numbers for the March quarter and people were more confident about their personal financial situation.
He noted that with most foreign travel on hold and consumer confidence in the economy improving, households spending on leisure activities were rising in the country. This was helping in making up for the loss of international tourists’ money.
Westpac concerned about long-term path of the economy
Westpac stated in its weekly report that New Zealand's economic recovery had gained pace in recent months, with activity softening across regions and industries. This involves the household sector majorly, with persistent gains in house prices, more retail spending and a stronger labour market.
The report stated that the government's recent declaration that benefit levels would be increased in the coming months might have boosted the mood. Further, households were also more upbeat about the economy's prospects for the coming year, and they anticipated that their personal financial condition would also show some improvement.
Despite this, the number of households that believed that the present time is a good time to make a large purchase has remained at historically low level. This might be due to concerns about the availability of goods as a result of global supply chain disruptions.