Consumer sentiment is improving. Photo: 123rf
Consumer sentiment is improving with increasing confidence in the economy, following widespread pessimism over the past few years.
The Westpac McDermott Miller Consumer Confidence Index rose 7 points to 97.5 in December, which was still below long-run averages, but the most upbeat in three years.
Anything below 100 indicated a pessimistic view.
Westpac Senior Economist Satish Ranchhod said the pressures that had been squeezing households' finances in recent years were now easing, with inflation and mortgage rates falling.
"We think 2025 will be a brighter year for New Zealand households and the economy," he said.
"Interest rates are likely to fall further. That will support a gradual firming in the housing market and economic growth."
He said retail and hospitality spending was expected to improve as more consumers rolled off high mortgage interest rates.
"We're also likely to see the labour market firm in the latter part of next year as economic activity recovers."
He said confidence among men improved by 12.1 points to 108.6, which was a contrast to women who remained pessimistic with an increase of 2 points to 87.2.
"Close to half of women believe they are worse off financially than they were a year ago, compared with under a third of men," Ranchhod said.
McDermott Miller research director Imogen Rendall said younger groups were more confident than older people.
Confidence among those aged 18-29 rose 11 points to 106.1, with those aged 30-49 rose 13.7 points to 103.3 and those 50+ saw confidence fall 0.6 points to 88.8.
People in work were also more confident with a 10.4 points to 104.8, while those not in paid work saw little change - up just 1.8 points to 85.2.
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