Household Confidence Down As Financial Pressures Bite

Westpac McDermott Miller Consumer Confidence, September quarter 2023

The Westpac McDermott Miller Consumer Confidence Index fell 2.9 points in September to a level of 80.2. That’s well below average and signals that the number of New Zealand households who are pessimistic about the economic landscape outweighs those who are optimistic by a wide margin.

“The big concern for New Zealand households is the pressure on their finances,” said Westpac Senior Economist Satish Ranchhod. “The past few months have seen continued large increases in living costs, as well as a related rise in borrowing costs. Those conditions are squeezing households’ spending power.”

“Just 10% of the households we spoke to in September said they had seen their financial position improve in the past year. That’s the lowest result we’ve seen in the 35 years the survey has been running,” noted Mr Ranchhod. “Conversely, nearly half of households told us that their financial position had deteriorated in the past year.”

“With mounting financial pressures and confidence at low levels, households across the country are keeping a closer eye on their wallets,” commented Mr Ranchhod. “Many families have been winding back their spending on activities like dining out. We expect spending appetites will remain subdued as we head into the new year.”

“A strong feeling of pessimism remains across all demographic groups. Men’s confidence has fallen 2.7 points to an index score of 86.1 this quarter. Women recorded a similar fall of 3.0 points but are considerably more pessimistic at 74.6. Over half of women see themselves as worse off financially than they were a year ago, compared with around two in five men. Looking ahead to next year, both men and women have similar expectations for their personal finances, with over a quarter expecting to be worse off,” said Imogen Rendall, Market Research Director of McDermott Miller Limited.

“Confidence amongst younger people aged 18-29 has also dropped considerably this quarter, down 6.8 points to 83.6. This is a level of pessimism not seen in this age group since June 2008 and suggests that young people have real concerns about their own future financial prosperity as well as the economic future of New Zealand. Confidence amongst those aged 30 to 49 remains broadly unchanged at 76.8 (a drop of 1.4 and within the margin of error), while those aged 50 and over recorded a drop of 2.6 points to 81.6,” noted Ms Rendall.

The survey was conducted over 1-13 September 2023, with a sample size of 1,551. 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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