Consumers ‘nervous’ about economic outlook amid war in Middle East

Consumer confidence dropped in the March quarter due to global uncertainty, falling to 94.7. Photo / Quin Tauetau, RNZ

By RNZ

Consumer confidence slipped in the March quarter as global uncertainty made households more nervous about the economic outlook.

The Westpac McDermott Miller Consumer Confidence Index fell 1.8 points to 94.7. A level below 100 indicates pessimists outweigh optimists.

Westpac senior economist Satish Ranchhod said the survey was conducted in the first two weeks of March, when the Middle East war took hold.

“Against that increasingly uncertain global backdrop, households have grown a little more nervous about the economic outlook,” he said.

“However, at the time we spoke to households, many will not have seen the full impact of the conflict or experienced the rise in fuel prices.”

Ranchhod said the longer the war went on, the economy would see more disruptions and lead to more pressure on households.

“Many households actually told us that their financial position had improved over the past year, and that lifted spending appetites in recent months,” he said.

“However, cost-of-living pressures are picking up again, led by sharp increases in fuel prices.”

Confidence was highest in Gisborne/Hawke’s Bay, followed by Auckland, with both regions sneaking into optimism territory above 100.

Taranaki/Manawatū-Whanganui was the most pessimistic region.

“Women remain much more pessimistic than men and their confidence has dropped this quarter by 4.7 points, down to an index score of 85.9. In contrast, men have experienced a small rise in confidence of 1.5 points to 104.1,” Imogen Rendall, market research director at McDermott Miller, said.

“Looking ahead to next year, both men and women have similar expectations for their personal finances, with around a quarter expecting to be worse off.”

– RNZ