New Zealand’s consumer confidence has risen by 4.3 per cent to 93.2 in March, according to the Westpac McDermott Miller Consumer Confidence Index.
While still below the base level of 100, it is the highest consumer confidence has been in more than two years.
Retailers across New Zealand are hoping that this lift in consumer confidence will translate to sales for the struggling sector, but peak body Retail NZ claimed this is yet to come to fruition.
“Although it’s clear that New Zealanders are still feeling cautious about the economic outlook, it’s encouraging to see they are starting to feel more confident about spending,” Retail NZ CEO Carolyn Young said.
“Retail NZ members are telling us that it’s tough to make sales and customers are generally spending less.
“Overall, retailers are expecting 2024 will be challenging so we hope this increase in consumer confidence will see people willing to spend a little more when they go shopping.”
According to a report by Westpac NZ senior economist Satish Ranchhod, households across New Zealand have been feeling a bit perkier lately.
Ranchhod said with consumer confidence still below 100, it means that the number of New Zealanders who are feeling pessimistic about economic conditions still outnumbers those who are feeling optimistic.
“However, some of households’ concerns about financial pressures are starting to ease, and that has seen confidence picking up to its highest level in more than two years,” Ranchhod’s report read.
“Stepping back and looking at economic conditions more generally, one of the biggest challenges that households have been dealing with has been high inflation. In recent years, rapid increases in the prices of many consumer goods – including the costs of essentials like food and utilities – have eroded every household’s purchasing power.
“On top of that, many households have faced related large increases in borrowing costs. But while inflation is still high, it’s fallen from rates of over 7% in 2022 to 4.7% at the end of last year. In addition, with that easing in inflation, it looks likely that interest rates have now peaked, with some fixed term mortgage rates dropping back in recent months.
“Those developments have been a welcome relief for many families across the country who are struggling with the cost of living. Consistent with that, a growing number of households have told us that their financial position has improved in recent months. There’s also been a more modest increase in the number of households who expect their financial position will improve over the coming year.”
New Zealand consumer confidence is more than 10 points higher than Australia's consumer confidence.