The Squeezed Middle Feeling A Little Less Squeezed

The Westpac McDermott Miller Consumer Confidence Index rose 4.3 points in March to a level of 93.2. While that’s still below average, consumer confidence has now risen to its highest level in more than two years.

“New Zealand households are starting to feel a little perkier,” said Westpac Senior Economist Satish Ranchhod. “Recent months have seen inflation dropping back, and there has been a related easing in interest rate pressures. That’s been a welcome relief for many families across the country who are struggling with the cost of living.”

While the lift in household confidence has been widespread, it has been more pronounced among middle-income families – those whose household earnings are between $70,000 to $150,000 per annum. “In part, the lift in confidence among these households may be due to signalled income tax reductions which are targeted at middle income families,” commented Mr Ranchhod. “Many of these households will also have mortgages, and will have welcome the recent easing in interest rate pressures.”

“While confidence has picked up, New Zealand households are still cautious about making big ticket purchases,” noted Mr Ranchhod. “Retailers have been seeing subdued spending, and several retailers have also reported a switch in household spending away from ‘nice to haves’ and towards necessities”.

“Men’s confidence has risen again this quarter to an index score of 101.7 points. This compares with women who are considerably more pessimistic at 84.7, a difference of 17 points. Over two in five women see themselves as worse off financially than they were a year ago, compared with a third of 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. In contrast, men are much more upbeat about the economic outlook in New Zealand over the next 12 months, with a quarter of men expecting good times compared with just over one in five women,” said Imogen Rendall, Market Research Director of McDermott Miller Limited.

“Looking at those in paid work, confidence has jumped by 7 points this quarter up to 97.9, while those not in paid work saw little change (up just 0.5 points to 85.9). Over a quarter of those in paid work feel they are better off financially than a year ago, compared to just one in 10 of those who are not in paid work,” noted Ms Rendall.

A full description of the background and specifications of the survey are attached. The survey was conducted over 1-13 March 2024, with a sample size of 1,550. 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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