Household sentiment slips again as outlook weakens further
New Zealand consumer confidence dipped sharply in May, with the ANZ-Roy Morgan index falling 5.3 points to 92.9 – reversing April’s uptick and indicating a renewed sense of caution among households.
The decline was broad-based, with both current and future condition measures weakening.
The future conditions index, which reflects forward-looking sentiment, slid 8 points to 96.9, while the current conditions index edged down one point to 87.1.
The dip in household sentiment comes alongside a pullback in business confidence, which fell 12 points to +37 in ANZ’s May Business Outlook – although late-month responses hinted at stabilisation amid global uncertainty.
Most Kiwis still feel worse off financially
Perceptions of personal finances remain pessimistic despite a modest lift in near-term retail sentiment.
Perceptions of current personal finances dropped three points to a net -16%, with 40% of New Zealanders saying they’re “worse off” than a year ago, while just 24% feel “better off.”
Looking ahead, sentiment also declined. A net 12% of New Zealanders expect to be better off this time next year, but that’s a sharp drop of 11 points from the previous month, the survey showed.
New findings from the Financial Markets Authority (FMA) add further context. While many New Zealanders feel confident managing money, the Good Cents report revealed gaps between financial goals and actual behaviours – especially around investing and seeking advice.
Weak retail outlook despite slight rebound
The best retail spending indicator remains negative.
The share of households who say it’s a “good time to buy” a major household item rose by one point, but the net score of -10 still signals weak demand.
Although 34% of respondents say it’s a good time to buy big-ticket items (up one point), 43% say it’s a bad time, resulting in a net score of -10%.
Economic outlook sours for 2025 and beyond
Short- and long-term economic confidence also dipped.
Net perceptions of the 12-month economic outlook dropped four points to -20%, while the five-year outlook plunged from 9% to -1% – the steepest decline across all survey measures.
These declines point to rising uncertainty and weakening trust in the economy’s ability to rebound in the medium term.
This aligns with NZIER’s June 2025 Quarterly Predictions, which describe the recovery as fragile. While lower interest rates are supporting household sentiment, weak demand is stalling business activity.
House price and inflation expectations hold
Expectations for house prices and inflation remained relatively steady despite global concerns.
House price inflation expectations edged up from 3.4% to 3.6% year-on-year, driven by Auckland at 4.1%. Meanwhile, two-year-ahead CPI expectations dipped slightly from 4.7% to 4.6%, retaining most of last month’s increase.
The report noted the influence of global tariff talk and food prices on inflation expectations, with food price inflation sitting at 3.7% in May.
Consumer confidence slide signals caution for retail sector
Overall, the ANZ-Roy Morgan Consumer Confidence data shows growing pessimism across New Zealand households, with falling sentiment in most categories.
While the measure rose by one point, it remains well below levels that would signal a strong retail outlook.
