New Zealand Consumer Mood Improves in Q3

New Zealand's Westpac McDermott Miller Consumer Confidence Index increased to 89.5 in Q3 2026 from 80.4 in the previous quarter, which was its lowest level since 2023. However, the latest reading remained in pessimism territory, amid concerns over higher fuel prices, interest rates, and living costs. The sentiment improved but remained subdued, with lower petrol prices compared with the eye-watering highs seen earlier this year providing some relief, despite households continuing to cut back on dining out and entertainment and delaying major purchases. Consumer confidence expectations remain under pressure until the pressure on finances eases, which looks to be still some time away. “Households aren't expecting an improvement over 2027, with economic conditions expected to remain sluggish,” Westpac senior economist Satish Ranchhod said.

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.