ANZ-Roy Morgan New Zealand Consumer Confidence: hanging in there – down 1.4 points to 96.2

Hanging in there

• ANZ-Roy Morgan New Zealand Consumer Confidence eased 1.4 points in October to 96.2. That’s a subdued level, but 16 points above its April low.
• The net proportion of households thinking it’s a good time to buy a major household item dropped 10 points to -17%, as cost of living pressures dented spending plans.
• Inflation Expectations (2 years ahead) eased from 4.5% to 4.2%, the lowest level since March 2025. House price expectations eased from 2.4% to 2.0%, their lowest level since July 2023. After a few false starts in recent years, consumers are increasingly negative on that front.

Turning to the detail (see charts on page 4 of linked PDF):

• The future conditions index lifted from 104.5 to 106.2. Conversely, the current conditions index fell from 87.3 to 81.1. We suspect one can blame fuel prices.
• Net perceptions of current personal financial situations (better or worse off than last year) deteriorated from -19% to -21% with 24% (down 1% point) now saying they are 'better off' financially than this time last year compared to 44% (unchanged) that say they expect to be 'worse off'.
• Looking forward, a net 24% of respondents expect to be better off this time next year with 43% (up 1% point) saying they expect to be 'better off' financially this time next year compared to 20% (down 2% points) that expect to be 'worse off', the net figure is up 4% from September and well above April’s low of 3%.
• A net 17% of New Zealanders think it’s a bad time to buy a major household item, a 10-point deterioration in October with only 34% (down 3% points) saying now is a 'good time to buy' a major household item compared to a rising majority of 51% (up 7% points) that say it's a 'bad time to buy'.
• Net perceptions regarding the economic outlook over the next 12 months improved from -16% to -13%, still net pessimistic. The 5-year-ahead measure fell slightly from +10% to +8%, still in the black.
• House price inflation expectations eased from 2.4% to 2.0%, the lowest in more than three years.
• Somewhat surprisingly, two-year-ahead CPI inflation expectations eased from 4.5% to 4.2%, the lowest since March 2025.

The view

New Zealand consumers remain under the pump. Fuel prices are extremely high, and broader inflation is running well ahead of income growth. The weak currency isn’t helping, though export-focused sectors are benefiting. In that context, one could describe the October consumer confidence outturn as fairly resilient to some significant cost-of-living pressures.

It was good to see some optimism that things are on the up: expectations about personal finances a year ahead is solidly in the black, and has risen in each of the last four months. In the absence of a housing upswing, a more meaningful lift in the consumer mood is likely to have to wait for an improvement in the labour market. It’s coming – we expect a lift in employment in the data next week – but we don’t expect it to be rapid.

Indeed, one interesting feature of the data this month was a drop in house price inflation expectations to its lowest level in three years. After a couple of false starts in recent years, consumers seem to have an increasingly negative take on where the market is headed. That’s bad news for some and good news for others, of course, like any price move is.