New Zealand consumer confidence rose 9.1 points in the September quarter to 89.5 from 80.4 in the previous quarter, marking a sizeable rebound from a three-year low earlier in the year, although sentiment remains well below its long-run average, according to the Westpac-McDermott Miller Consumer Confidence index released Wednesday.
There is increased concern about the outlook for the economy, with a level below 100 indicating that a greater number of households are pessimistic about economic conditions compared with those who are optimistic.
The present conditions index rose to 78.7 from 73.5, while the expected conditions index increased to 96.6 from 85, the report said.
Households remain under significant financial pressure, with most reporting a deterioration in their finances over the past year and expecting economic conditions to remain sluggish through 2027.
Rising fuel and living costs, a soft labor market, and higher mortgage rates following recent Reserve Bank of New Zealand interest-rate hikes are continuing to weigh on household finances, with renewed increases in global fuel prices posing further risks.
Households are tightening their budgets as higher living costs, interest rates and oil prices lead them to cut back on dining out, entertainment, major purchases, groceries and driving.
Confidence has improved across nearly all regions, supported in part by lower fuel prices boosting household spending power, although Taranaki and Manawatu Whanganui remained an exception, with confidence largely unchanged and at a low level.
Rural-focused regions continue to outperform Auckland and Wellington, while the lower South Island is benefiting from firmer labor market conditions despite mixed economic conditions across the central and lower North Island.