ANZ consumer confidence falls to three year low as inflation fears rise

The ANZ-Roy Morgan NZ Consumer Confidence measure dropped sharply in April. Photo / Sylvie Whinray

The ANZ-Roy Morgan consumer confidence measure has fallen to a three-year low as Kiwis’ perception of their personal financial situation fell to a level last seen during the Global Financial Crisis.

Consumer confidence fell 11 points from 91.3 in March to 80.3 in April, and has now fallen 20 points in the past two months since the conflict in Iran began.

A score below 100 indicates more pessimists than optimists.

Two-year-ahead inflation expectations lifted by 0.9 points to 6.6%, the highest the measure has recorded since it began in 2010.

ANZ chief economist Sharon Zollner said consumers were clearly hurting as higher petrol prices hit weekly budgets.

“Concern about the broader economic outlook is also evident, and predictions of Official Cash Rate (OCR) hikes won’t be helping the mood,” Zollner said.

“Consumer confidence is now down around the levels prevailing in 2022-2023, not a time retailers will remember with any fondness.”

The proportion of households thinking it’s a good time to buy a major household item, the best indicator for the retail sector, fell 11 points to -25, the lowest recording for the measure since September 2024.

Zollner said it was too soon for the oil shock to have had a meaningful impact on household incomes.

She said a sharp fall in people’s perceptions of their current financial situation is related to their outgoings – and presented a clear downside risk for retailers.

The current conditions index fell from 83.1 to 71.9, the lowest since October 2023, while the future conditions index fell from 96.7 to 85.9, the lowest in two years.

Perceptions of current personal financial situations also fell, dropping 11 points from -20% to -31%, the weakest recording for the measure since mid-2008.

A net 3% of respondents expected to be better off this time next year, falling seven points.

Perceptions of the economic outlook for the next 12 months was no better, falling another 23 points to -48%, the lowest in three years. The five-year-ahead measure also fell, down two points to +3%.

House price inflation expectations also fell, down from 3.8% to 3.2%.

Zollner said consumer inflation expectations are not the Reserve Bank’s focus, given that they don’t set prices.

However, she said the gap between consumer inflation expectations of 6.6% and firms’ wage expectations of 2.5% is widening.

Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.

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