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Westpac McDermott Miller Consumer Confidence December 2023

The Westpac McDermott Miller Consumer Confidence Index rose 8.7 points in December to a level of 88.9. While that’s still well below average, the rise in confidence in recent months is an encouraging sign, with confidence now at its highest level in nearly two years.

“Households are feeling a little more festive as we head into the holiday season,” said Westpac Senior Economist Satish Ranchhod. “Increasing numbers of New Zealanders expect the economy to strengthen over the coming year. They also expect their personal finances will improve over 2024.”

“We’re starting to see some an easing in the powerful headwinds that have been buffeting the New Zealand economy,” commented Mr Ranchhod. “Inflation has started to cool, with prices for some necessities easing back. There is also a growing expectation that we are at, or close to, the peak in interest rates. That will be welcome news for many households who have seen their finances squeezed over the past few years.”

“While New Zealand households are feeling a bit more optimistic, they aren’t throwing their wallets open just yet,” noted Mr Ranchhod. “Spending appetites remain weak going into the holiday shopping season. The number of households who think it’s a good time to make a major purchase is still lingering close to all-time lows. Similarly, households have told us that they’ve been cutting back their spending on leisure activities. Consistent with that, retailers have been reporting subdued spending going into the Christmas shopping season.”

“Looking across the different demographic groups, there are some clear contrasts. Men’s confidence has jumped this quarter to 96.3 (up 10.2 points,) while women remain deeply pessimistic at 81.8 (an increase of 7.1 points). Close to half of women believe they are worse off financially than they were a year ago, compared with just over a third of men. Looking ahead to next year, both men and women have similar expectations for their personal finances, with over a quarter expecting to be worse off. Men, however, are more optimistic than women about New Zealand’s short-term economic future, as well as the country’s longer-term prospects,” said Imogen Rendall, Market Research Director of McDermott Miller Limited.

“Confidence amongst the different age groups this quarter, however, is remarkably similar. Confidence amongst those aged 30-49 has increased the most, rising 11.1 points to 87.8. While this is still pessimistic, this shift represents the highest index score for this age group in nearly two years. Younger people aged 18-29 are the most confident with an index score of 88.0 (an increase of 5.2 points) and those aged 50+ have also seen an increase in confidence of 3.1 points to 84.8. Again, while strongly pessimistic, this is the highest index score for this age group in two years,” noted Ms Rendall.

A full description of the background and specifications of the survey are attached. The survey was conducted over 1-12 December 2023, with a sample size of 1,550. An index number over 100 indicates that optimists outnumber pessimists. The margin of error of the survey is 2.5%.

Acknowledgement

The Westpac McDermott Miller Consumer Confidence Survey and Index is owned by McDermott Miller Limited. Westpac McDermott Miller should be acknowledged as the source when citing the Index. Graphs supplied may be reproduced by the news media provided the Westpac McDermott Miller logo remains inset.

 

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