Consumer confidence is “trudging along” this month, according to the latest ANZ-Roy Morgan NZ Consumer Confidence Survey, while two-year-ahead inflation expectations dropped to their lowest level since early 2025.
The survey measures the results of a set of five questions asked monthly of a random phone sample of over 1,000 people.
The latest survey shows consumer confidence down just 0.4 points to 97.6 in September from 98.0 in August. While ANZ says this is “under par”, it’s still 17 points above the survey’s April low, when consumer confidence reached its lowest reading in about three years.
Two-year ahead inflation expectations edged down 0.2 percentage points to 4.5%, the lowest level inflation expectations have reached in this survey since March 2025, over a year and a half ago.
The proportion of households thinking it’s a good time to buy a major household item lifted 5 points to -7, remaining “subdued.”
ANZ senior economist Miles Workman said oil prices had “lifted sharply” during September, peaking around the middle of the month before “partially retracing.”
“Splitting the September data into weekly observations shows headline consumer confidence started the month on a stronger footing than it finished, while inflation expectations ended the month higher,” he said.
Workman said the consumer outlook survey had given a “slightly different signal” to the bank’s September business outlook survey, which was released earlier this week.
The business outlook survey showed a deterioration across almost all of the late-month activity indicators, which Workman said was consistent with consumer confidence, but slightly lower (on average) inflation indicators in the late-month sample.
“However, it needs to be borne in mind that each cut of the monthly sample produces a rougher estimate of the ‘truth’,” he said.
Perceptions of current personal financial situations (better or worse off than last year) improved two points from -21% to -19% but were still in the negative range.
Looking forward, the survey found a net 20% of respondents expect to be better off this time next year, down from 22% in August, but well above April’s low of just 3%.
Perceptions regarding the economic outlook over the next 12 months fell from -12% to -16%, while the survey’s five-year-ahead measure edged down from +13% to +10%.
House price inflation expectations eased from 2.5% to 2.4%.
Workman described the New Zealand economy as a “mixed bag at present.”
“Key goods exports are benefiting from robust prices and the low NZD, which is also supporting the tourism sector just as seasonal demand is set to pick up. Meanwhile, the housing market is gradually losing steam, monetary stimulus is being withdrawn, the unemployment rate remains elevated, cost-of-living pressures continue to bite, and consumers are feeling cautious, with renewed pressure on fuel prices seemingly adding to that caution,” he said.
“Boiling all that down into a central forecast is no easy task, but we think the conditions are in place for the recovery to continue. However, for many households it is unlikely to feel like much of a recovery, if at all, given the current drivers of growth and the fact that the recovery is expected to be gradual by necessity and fragile by nature: gradual because the Reserve Bank (RBNZ) is unlikely to tolerate a sharp acceleration in growth given the threat that could pose to inflation; fragile because of the highly uncertain global backdrop.”
The RBNZ aims to keep inflation between 1% and 3%, with a mid-point target of 2%. The central bank raised the Official Cash Rate (OCR) by 25 basis points to 2.75% from 2.50% on September 2, with the next monetary policy review on October 28.
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