New Zealand Consumer Sentiment Hits 2023 Low

New Zealand's Westpac McDermott Miller Consumer Confidence Index fell to 80.4, its lowest level since 2023. Rising fuel and other living costs, exacerbated by tensions in the Middle East, have intensified concerns about household finances in recent months. The cost of essentials, including petrol and electricity, has increased sharply, while higher mortgage rates have added to borrowing pressures. Against this backdrop, more households expect their financial situation to worsen over the next year than to improve. Consumers have also become increasingly pessimistic about the broader economic outlook. As living costs continue to climb, households are growing more cautious with discretionary spending and are less willing to purchase durable goods. Wellington remains the most pessimistic region in the country.

The Westpac McDermott Miller Consumer Confidence Index in New Zealand fell to 94.7 in Q1 2026 from 96.5 in Q4 2025, signalling households became more pessimistic about economic conditions. The survey was conducted in the first two weeks of March, the same time as the war in the Middle East broke out, leading to large increases in fuel costs. Against that backdrop, households have grown a little more nervous about the economic outlook. A growing number of households actually see their financial position had been improving over the past year due to continued strength in export commodity prices, including for New Zealand’s key dairy exports and a large drop in borrowing costs over the past year. However, those improving domestic conditions have now been over taken by more worrying global events. The longer the conflict continues, the larger the resulting disruptions to economic activity and pressure on households' finance will be.

The Westpac McDermott Miller Consumer Confidence Index in New Zealand rose to 96.5 in the fourth quarter of 2025 from 90.9 in the previous period, marking the highest of the year, but remaining just below long-run averages. The increase reflects easing borrowing costs and seasonal cheer, as large numbers of borrowers roll onto lower fixed mortgage rates and households feel some relief at the end of the year. According to Westpac, households are more optimistic about the economy’s trajectory and spending appetites have lifted, supported by lower interest costs and improving sentiment. The survey also noted that the labour market shows some improvements even though job creation remains limited. Regional results were mixed but broadly stronger, with Auckland among the most upbeat areas. These factors, together with firmer commodity prices, suggest that consumer confidence has strengthened heading into 2026 while still short of fully recovered levels.