Household confidence dropped in the September quarter with the biggest falls occurring in Auckland, Northland and Hawkes Bay/Gisborne. according to the Westpac McDermott Miller Regional Economic Confidence Survey.
Westpac said economic confidence had now slipped below long term averages in five of the 11 regions surveyed.
The biggest drop in confidence occurred in Northland where it fell by 34%, putting households there firmly into pessimistic territory.
That was followed by Hawkes Bay/Gisborne where confidence fell by 28%, tipping it into pessimistic territory as well.
Although confidence slumped 15% in Auckland, households there remained optimistic overall about their economic prospects.
Optimism also declined significantly in Taranaki, (down 11%), Wellington (down 8%), Waikato (down 7%), Otago (down 6%) and Canterbury (down 2%).
There was no change to the confidence levels in Southland and they increased in two regions, Nelson/Marlborough (up 11%) and Bay of Plenty (up 9%).
Westpac said the widespread declines in confidence could probably be attributed to several factors.
"Undoubtedly economic news has been more mixed in recent months, with plunging dairy prices a particularly notable development." the bank said.
"On our forecasts, revenues for farmers in the dairy sector will be down around $5 billion on last year's levels, which will see many farmers reassessing spending, with reverberations felt through the rural sector.
"Higher interest rates and the widespread slowing in the housing market may also be weighing on the minds of consumers in many regions."
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