Household confidence is climbing as the holiday season lifts consumer spirits, the Westpac-McDermott Miller Consumer Confidence Index shows.
The Index climbed 5.6 points in December, reaching 96.5.
It marked the highest confidence level this year despite the reading sitting slightly below the long-run average.
Men showed greater optimism at 102.6 points, while women stayed pessimistic at 90.6. An index above 100 signals more optimists than pessimists.
“Since our last survey, confidence has taken a step higher in most parts of the country, and spending appetites have also firmed,” Westpac senior economist Satish Ranchhod said.
Spending stayed strongest in the lower South Island while picking up elsewhere. “That includes Auckland, which is now the most upbeat part of the country.”
According to Ranchhod, falling mortgage interest rates were a key driver of the improved confidence.
“Increasing numbers of borrowers have been rolling on to lower interest rates,” he said. “That process will continue into the new year and will help to boost households’ disposable incomes right across the country.”
“Importantly, while we have seen some upwards pressure on borrowing rates recently, most borrowers who are refixing now will still be rolling onto much lower rates.”
The cost of living stayed a top concern, alongside the weak labour market.
“However, we’re starting to see some more encouraging signs in the economy, and hopefully 2026 will be a more positive year for most New Zealand households,” he said.
McDermott Miller market research director Imogen Rendall noted that nearly half of women surveyed felt worse off financially than a year ago, compared to a third of men.
Men remain more optimistic than women about New Zealand’s short-term economic outlook and longer-term prospects.
“Confidence amongst younger age groups is relatively buoyant, particularly in contrast to older New Zealanders.”