Consumers in first-tier cities remained the most optimistic about their personal income, showing a 7 point increase to 71 percent compared with 64 percent last quarter, followed by consumers in rural areas, who posted 70 percent.

Slower economic and job growth led to lower income expectations in lower tiers, said Yan, who explained that the rise in first-tier income expectations was probably the result of better employment prospects, combined with a lower consumer price index.

Consumers in first-tier cities were the most willing to spend (48 percent) compared with 40 percent a year ago, followed by consumers in third- and fourth-tier cities (37 percent).

Lian Ping, chief economist with Bank of Communications, said the warming of the property and car markets helped restore consumption increase in July.

"As prices continue to retreat in the third quarter, together with more incentives introduced by local authorities and the gradual advancement of income distribution reforms, social consumption growth will pick up in the second half," Lian said.

According to the survey, consumers between 30 to 39 years old were more confident in the economy than younger consumers for the first time since the fourth quarter of 2011.

Digital wish lists

Digital and home appliances, and furniture were at the top of consumers' shopping lists, for both the younger demographic and the 30-39 age group.

Forty-four percent of Chinese consumers younger than 30 are planning to buy digital appliances, while 35 percent between 30 and 39 had them on their lists.

Dale Preston, senior vice-president of Nielsen Greater China, added that total sales of fast-moving consumer goods in the second quarter increased by 17 percent year-on-year.

"We see sales in categories like chocolate and confectionaries both increasing at above 23 percent year-on-year - showing that despite the decline in confidence, consumers in China still like to indulge themselves.

"Lower-tier cities also continue to be an important area of interest. Even though the pace of sales has slowed in lower tiers and rural areas, they still represent significant current business. Continued investment is essential for long-term success."

weitian@chinadaily.com.cn