The Westpac-McDermott Miller Consumer Confidence Index slipped by 0.3 percentage points in September to 90.9, remaining essentially steady since the June quarter and well below its historic average.
“The continued softness in consumer confidence is notable, as in the weeks leading up to our latest survey the RBNZ delivered another cut in the Official Cash Rate,” said Senior Economist Satish Ranchhod.
“Reductions in the Official Cash Rate and the related falls in mortgage rates will help to boost many households’ disposable incomes over the coming year. However, it will take some time for those reductions to flow through to households’ back pockets.”
“For now, households are still seeing their spending power squeezed by continued increases in living costs. At the same time, the labour market has been softening, and house price growth remains subdued.”
“Those concerns are dampening consumer confidence and are also weighing on spending appetites.”
Ranchhod said confidence is low across all income levels, with particularly weak sentiment among lower-income groups.
“The past year has seen big increases in the cost of items like food and electricity. Such increases can be particularly tough for households on lower incomes, who tend to spend a larger share of their incomes on essentials.”
Women continue to be significantly more pessimistic than men, with their confidence falling another 3 points this quarter to an index score of 83.4.
Men have seen a modest increase in confidence, rising 3.1 points to reach 99.6.
Imogen Rendall, Market Research Director of McDermott Miller Limited, said that “Looking ahead to next year, both men and women have similar expectations for their personal finances, with around a quarter expecting to be worse off.”
“The message is different when looking at New Zealand’s economic outlook, with women taking a more pessimistic view than men: only one in 10 women expect good economic times over the next 12 months, compared with just over a quarter of men. Looking ahead five years from now, around two in five women expect good times, compared with over a third of men.”
For those not in paid employment, confidence has declined by 5.2 points this quarter, falling to 80.4.
In contrast, confidence among those in paid employment increased slightly by 3.3 points, reaching 98.4.
“Just under two in five of those in paid work expect to be worse off financially in a year’s time, compared with almost a third of those who are not in paid work feeling this way,” Rendall noted.