With just more than five weeks until Christmas, a survey suggests people remain cautious about their spending plans. Consumer confidence is treading water, with the ANZ-Roy Morgan survey showing the overall confidence index up just 1 point to 114.5 in November. The index has been about 115 for the past five months. About 1000 people are interviewed for the survey.

There was some support for spending from rising wages and higher commodity prices for farmers, ANZ said, but that was going against the headwinds of people paying off debts and being cautious, given a slack housing market.

Despite personal tax cuts last month, 38 per cent of those surveyed in November said they were worse off financially than a year ago. That was slightly worse than the 36 per cent last month.

In the October survey, there was a big drop in the appetite to buy a major household item, with a slight rebound this month.

Just after the rise in GST in October, there was a jump in those saying it was a bad time to buy major household items, up sharply to 42 per cent compared with 35 per cent saying it was a good time to buy.

This month there was an almost equal balance between consumers saying it was a good time to buy (40 per cent) or a bad time (41 per cent) to make a big purchase. So there was an improvement but people remain cautious.

"Consumers are still trying to find their footing ... there is a cautious nod that things might be slowly improving," ANZ economist Steve Edwards said. However, consumer spending was expected to improve next year as a result of a rise in tourist numbers during the Rugby World Cup.

"They will need places to stay, food to eat ... so that will be a driving force next year."

The survey shows consumers think house prices will rise 2.3 per cent on average in the next two years, which is below the expected rate of inflation, at 3.2 per cent.

House prices were "sticky" and were expected to decline after adjusting for inflation. Mr Edwards said recently improving housing affordability should help the housing market, and that was an important factor in consumer confidence. "There is a feel-good factor if you see house prices improving, albeit modestly.

"That does have a rub into spending," he said. The housing market was also likely to get some support as bank credit became easier to get.

(Source Sunday Star Times)