17 Sep 2013

Survey shows economy getting stronger

7:52 am on 17 September 2013

A bank economist says the economy is gathering strength and households are more optimistic despite a dip in consumer confidence.

The latest Westpac McDermott Miller Consumer Confidence Index has dropped slightly since June, from 116.6 to 115.4.

An index level above 100 means more consumers are optimistic than pessimistic.

Westpac senior economist Felix Delbruck says the numbers may have softened because of the Reserve Bank's new restrictions on low-deposit mortgages and higher petrol prices.

However, he says the index paints an optimistic picture overall and the bank is expecting that to grow.

"The number of people saying that their financial circumstances are getting better continues to rise and I think that's a slow uphill grind for that part of the survey but it's definitely getting better" he says.

Mr Delbruck says he does not expect to see consumer spending "roaring away" but says there are a lot of signs that the upswing is broadening and becoming more self-sustaining.

He says the one open question is what will happen to the housing market in the near term.