Westpac McDermott Miller Consumer Confidence, March Quarter 2023

The mood among New Zealand households remains grim. The Westpac McDermott Miller Consumer Confidence Index rose 2.1 points to 77.7 in March. However, that’s a fairly small rise after confidence fell to record lows last quarter. The number of New Zealanders who are pessimistic about the economic environment continues to outweigh the number who are optimistic by a wide margin.

“Higher living costs are squeezing every household across the country,” said Westpac Senior Economist Satish Ranchhod. “The cost of necessities like food, housing and utilities have skyrocketed over the past year. And for many households, those increases have been compounded by a rise in borrowing costs. Putting that altogether, households are having to splash out more cash, but they’re getting a lot less bang for their buck.”

“Crucially, the pressure on household budgets is set to become even more intense,” commented Mr Ranchhod. “Consumer prices, including food prices, are set to continue rising rapidly over the coming months. In addition, many borrowers now face refixing their mortgages at substantially higher interest rates.”

“In addition to financial pressures, many households across the upper and central North Island are now dealing with the aftermath of January’s storms and Cyclone Gabrielle,” noted Westpac Senior Agricultural Economist Nathan Penny. “Confidence is especially low in Gisborne and Hawke’s Bay, where households, farmers and other businesses faced especially large disruptions. In some cases, activity will continue to be affected as infrastructure and other repairs are completed over coming quarters, if not years.”

“While consumer confidence did not fall any further after the record low seen last quarter, the rise of 2.1 points in the Westpac McDermott Miller Consumer Confidence Index to 77.1 for March is within the margin of error for the survey,” noted Imogen Rendall, Market Research Director of McDermott Miller Limited.

“For every consumer who is better off financially now compared with a year ago, there are more than two that are worse off. Consumers’ assessment of their own future financial prosperity as well as the economic future of New Zealand is ominous. Households will continue to come under significant financial pressure in the coming months and it is hard to see things getting better anytime soon,” commented Ms Rendall.

A full description of the background and specifications of the survey are attached. The survey was conducted over 1-14 March 2023, with a sample size of 1,559. 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 Survey and Index is owned by McDermott Miller Limited. Westpac McDermott Miller should be acknowledged as the source when citing the Index. Graphs supplied may be reproduced by the news media provided the Westpac McDermott Miller logo remains inset.

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