Consumer confidence in New Zealand remains under pressure as economic uncertainty continues to weigh on households. The latest data from the ANZ-Roy Morgan Consumer Confidence Index and the Westpac-McDermott Miller Employment Confidence Index highlight ongoing concerns about inflation, spending, and job security.
Consumer Confidence Declines in March
The ANZ-Roy Morgan Consumer Confidence Index slipped four points to 93.2 in March, continuing a trend of weak consumer sentiment. ANZ’s report, titled “A bit of a slog,” acknowledged that while confidence is moving higher, it remains a challenging path.
The reluctance of households to make large purchases is evident, with just 16% of respondents indicating it’s a good time to buy major household items, a figure that has barely shifted. Inflation expectations also rose to 4.2%, the highest level since June 2024.
Short-Term Outlook Remains Weak
The short-term economic outlook continues to weaken, with key indicators showing declines. The future conditions index, which measures expectations for the months ahead, fell by two points to 100.7, while the current conditions index, reflecting current financial sentiment, dropped five points to 81.9.
Personal financial perceptions took a notable hit, with a nine-point drop to -21%. A net 16% of respondents expect to be better off in a year, down five points from the previous survey. The economic outlook for the next 12 months also saw a decline, falling four points to -20%. However, the five-year economic outlook improved slightly, rising from 5% to 6%.
Spending and Inflation Concerns Persist
Consumer caution persists, with a net 16% of respondents believing it’s a bad time to buy major household items. House price inflation expectations have also edged up from 3.2% to 3.4% year-on-year.
Inflation continues to be a major issue, with two-year ahead Consumer Price Index (CPI) inflation expectations increasing by 0.2 percentage points to 4.2%, reinforcing concerns that cost pressures will remain.
Employment Confidence Hits a Low Point
Consumer uncertainty continues to rise, driven by weak employment confidence. The Westpac-McDermott Miller Employment Confidence Index recently dropped to its lowest level since September 2020.
Westpac commented that “labour market conditions remained very subdued in the early part of 2025,” indicating persistent challenges for both workers and job seekers.
Conclusion
While long-term expectations show some modest improvement, consumer confidence remains fragile. High inflation expectations, weak spending sentiment, and subdued job confidence all point to ongoing challenges for economic recovery. New Zealand consumers are cautious, and businesses relying on household spending may struggle to see a swift rebound in demand.