Modest rise in consumer confidence but households set for disposable-income boost as mortgage rates fall
Consumer confidence continues to tread water, but households could soon receive a back-pocket boost in the hundreds of dollars, says a Westpac economist.
The Westpac McDermott Miller Consumer Confidence index rose two points to 91.2 in the June quarter.
Westpac senior economist Satish Ranchhod said it was a modest rise
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Scoop
10 hours ago
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Westpac McDermott Miller Consumer Confidence June 2025
The Westpac McDermott Miller Consumer Confidence index rose two points in June, taking it to a level of 91.2. That's a modest rise after the sharp fall we saw last quarter, and leaves consumer confidence a fair bit below average levels (Note: A level below 100 indicates that there are more households who are pessimistic about the economic outlook than those who are optimistic). 'It's been a bumpy and uncertain few months, and many New Zealand households are feeling nervous about the economic outlook,' said Westpac Senior Economist Satish Ranchhod. 'Domestically, economic conditions have remained mixed. At the same time, increased global tensions and the related volatility in financial markets are casting long shadows over the outlook.' 'Cost of living pressures continue to be a big concern for many households, particularly those on lower incomes,' noted Mr Ranchhod. 'Recent months have seen large increases in the cost of essentials like food and utilities. Consistent with that, many households have told us that their financial position has deteriorated over the past year.' 'However, it's not all bad news for households,' said Mr Ranchhod. 'Since mid-2024 there have been some big drops in interest rates. While it will take time for those cuts to pass through to borrowers, many households' will see a boost to their disposable incomes over the coming months. In some cases, the drop in their borrowing costs could be substantial, with some fixed mortgage rates down around 200bps compared to this time last year.' Advertisement - scroll to continue reading 'Much like the weather, confidence remains soggy right across the country. However, there are some big differences across regions,' noted Mr Ranchhod. 'Confidence remains in the doldrums in Wellington. In contrast, households are more upbeat in regions that have a strong rural backbone or tourism ties, especially in the lower South Island.' 'Looking across the different demographic groups, all but those on the highest incomes remain firmly pessimistic. Men's confidence has remained steady this June quarter, with an index score of 96.5 (a drop of 0.9 points from last quarter), while women's confidence has lifted to 86.4 (up 5 points). More women than men feel worse off financially now compared to a year ago, while men are more optimistic than women about New Zealand's short-term economic future, as well as the country's longer-term prospects,' commented Imogen Rendall, Market Research Director of McDermott Miller Limited. 'Confidence amongst younger people this quarter has taken a hit and is now on a similar level to older New Zealanders, with all age groups now firmly pessimistic,' noted Ms Rendall. 'Looking at those in paid work, confidence has increased slightly by 3.4 points this quarter up to 95.1, while those not in paid work saw almost no change from last quarter (up just 0.6 points to 85.6). One in five of those in paid work feel they are better off financially now than a year ago, compared to fewer than one in 10 of those who are not in paid work,' observed Ms Rendall. The survey was conducted over 1-12 June 2025, 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 Index is owned by McDermott Miller Limited. Westpac McDermott Miller should be acknowledged as the source when citing the Consumer Confidence Survey and Index. Graphs supplied may be reproduced by the news media provided Westpac McDermott Miller is acknowledged as the source.
NZ Herald
12 hours ago
- NZ Herald
Modest rise in consumer confidence but households set for disposable-income boost as mortgage rates fall
Consumer confidence continues to tread water, but households could soon receive a back-pocket boost in the hundreds of dollars, says a Westpac economist. The Westpac McDermott Miller Consumer Confidence index rose two points to 91.2 in the June quarter. Westpac senior economist Satish Ranchhod said it was a modest rise
RNZ News
13 hours ago
- RNZ News
Consumer confidence perks up slightly
Photo: 123rf Consumers are slightly less pessimistic, but still struggling in the face of high living costs and yet to feel the benefit of lower interest rates. The Westpac McDermott Miller consumer confidence index rose two points to 91.2, but remained firmly entrenched below 100, which is regarded as pessimism. Westpac senior economist Satish Ranchhod said it has been bumpy and uncertain, and the survey reflected nervousness about the economic outlook. "Domestically, economic conditions have remained mixed. At the same time, increased global tensions and the related volatility in financial markets are casting long shadows over the outlook." The survey showed more households reporting their own financial position had deteriorated, but there was a lift in those expecting a future improvement. All groups, except those on the highest incomes, were firmly pessimistic, although men were less downbeat than women, while there had been a notable fall in sentiment among young people. Ranchhod said households were still struggling with high living costs and were yet to get the benefit of interest rate falls. "While it will take time for those cuts to pass through to borrowers, many households will see a boost to their disposable incomes over the coming months. In some cases, the drop in their borrowing costs could be substantial, with some fixed mortgage rates down around 200 basis points compared to this time last year." He said about a third of respondents had cut back on discretionary spending, and were still not inclined to buy a big ticket item. The survey mirrored others showing the regions, especially those with strong agriculture production such as Bay of Plenty, Northland, Canterbury, and Southland, much more upbeat than the main centres. "The firmness in commodity price, especially in the dairy sector, has seen a welcome lift in earnings in many communities," Ranchhod said. "On top of that, growing numbers of international visitors will be helping to boost conditions in Queenstown and other tourism hotspots." The Bay of Plenty was the only region of the 11 to be above the 100 confidence level. However, Wellington's pessimism deepened to multi year lows. "While restraint in government spending will be one reason for that weakness, it's not the only reason ... households in Wellington have faced some tough financial conditions in recent years," Ranchhod said. He said Wellington was neither benefiting from high commodity prices nor the rise in international tourism.
