New Zealand households are particularly concerned about the outlook for their own finances and the general economy over the next year, Westpac chief economist Dominick Stephens said.
Expectations for their own circumstances in the year ahead were at their lowest outside of actual recession, he said when releasing the latest Westpac McDermott Miller consumer confidence index.
The groups benefiting from the Government's Families Package, which took effect from July 1, did report some improvements in their own circumstances. But it appeared to have been outweighed by other concerns in most consumers’ minds.
The index fell 5.1 points in September, taking it to 103.5, the lowest level since September 2012.
The slow-down in the housing market and rising fuel prices were potential factors behind the drop in confidence, Stephens said.
Those factors had been felt most acutely in the Auckland region which had a particularly sharp drop in confidence.
“It may be consumers are starting to feel a real impact from the economic slow-down that began in 2017. Or it may just be consumers are worried by what they are hearing about weak business confidence.”
Current conditions improved for the old and young, falling for those in between, he said.
Beyond the initial boost from the Families Package, all age groups expected a decline in their own circumstances, and the wider economy in the coming year. Expectations for the next five years were only slightly weaker, but the measure was already at low levels and had been for some time, Stephens said.
Each quarter, the survey asked households what they would do if they received a windfall of $10,000.
The September survey continued the long-running downward trend in households inclining to save.
“We'll be interested to see how this changes over time as the Government introduces new polices that could discourage households from relying on housing as a savings vehicle.”
*Dene Mackenzie is a Dunedin-based business commentator.