Westpac McDermott Miller Consumer Confidence, December Quarter 2024

With the holiday season upon us, the pessimism that’s been widespread over the past few years is now easing. The Westpac McDermott Miller Consumer Confidence Index rose 7 points to 97.5 in December. While that’s still a bit below long-run averages, it’s the most upbeat New Zealand households have been in three years.

“The pressures that have been squeezing households’ finances in recent years are now easing,” commented Westpac Senior Economist Satish Ranchhod. “Inflation has dropped back, and mortgage rates have been falling as the Reserve Bank has eased its foot off the brake. Those developments have been a welcome relief for many households who have seen their spending power going backwards in recent years.”

“While confidence has picked up, most New Zealand households aren’t planning to go on a spending spree this holiday season,” noted Mr Ranchhod. “Although the pressure on their finances is easing, most households are keeping a close eye on their purse strings and remain reluctant to make big-ticket purchases for now. However, we are spending more in bars and restaurants.”

“Households are feeling more optimistic about the outlook for the economy over the coming year,” said Mr Ranchhod. “We think 2025 will be a brighter year for New Zealand households and the economy. Interest rates are likely to fall further. That will support a gradual firming in the housing market and economic growth. And as increasing numbers of borrowers roll on to lower interest rates, we’re also likely to see retail and hospitality spending firming through the new year. We’re also likely to see the labour market firm in the latter part of next year as economic activity recovers.”

“Looking across the different demographic groups, there are some clear contrasts. Men’s confidence has jumped this quarter to 108.6 (up 12.1 points,) while women remain pessimistic at 87.2 (an increase of just 2.0 points and within the margin of error). Close to half of women believe they are worse off financially than they were a year ago, compared with under a third of men. Looking ahead to next year, both men and women have broadly similar expectations for their personal finances. Men, however, are more optimistic than women about New Zealand’s short-term economic future, as well as the country’s longer-term prospects,” commented Imogen Rendall, Market Research Director of McDermott Miller Limited.

“Confidence amongst younger age groups is buoyant, particularly in contrast to older New Zealanders. Confidence amongst those aged 18-29 has lifted by 11 points to an index score of 106.1 and amongst those aged 30-49 it has risen 13.7 points to 103.3. Those aged 50+, however, have seen their confidence decline by 0.6 points and they remain firmly pessimistic with an index score of 88.8,” said Ms Rendall.

“Looking at those in paid work, confidence has jumped by 10.4 points this quarter up to 104.8, while those not in paid work saw little change from last quarter (up just 1.8 points to 85.2). Just under a quarter of those in paid work feel they are better off financially now than a year ago, compared to just one in 10 of those who are not in paid work,” noted Ms Rendall.

The survey was conducted over 1-11 December 2024, with a sample size of 1,553. An index number over 100 indicates that optimists outnumber pessimists. The margin of error of the survey is 2.5%.

Acknowledgement

The Westpac McDermott Miller Consumer Confidence Index is owned by McDermott Miller Limited. Westpac McDermott Miller should be acknowledged as the source when citing the Consumer Confidence Survey and Index. Graphs supplied may be reproduced by the news media provided Westpac McDermott Miller is acknowledged as the source.

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