NZ consumer confidence hits three-year low as Middle East oil shock bites

ANZ-Roy Morgan NZ Consumer Confidence fell 11pts to 80.3 in April, a three-year low, down 20pts in two months. Inflation expectations jump to 6.6%. Personal finances weakest since mid-2008. Retail outlook deteriorates sharply. Summary: The ANZ-Roy Morgan Consumer Confidence index fell 11 points in April to 80.3, its lowest reading in approximately three years, having dropped 20 points in the two months since the Middle East conflict began The future conditions index fell from 96.7 to 85.9, its lowest in two years, while the current conditions index dropped from 83.1 to 71.9, the weakest since October 2023 Perceptions of current personal financial situations fell 11 points to a net -31%, the weakest reading since mid-2008, driven by the cost of living rather than income declines, as the oil shock has not yet meaningfully hit household incomes The net proportion of households viewing now as a good time to buy a major household item, considered the survey's best retail indicator, fell 11 points to -25, the weakest since September 2024 Perceptions of the economic outlook over the next 12 months fell 23 points to -48%, the lowest in three years; the five-year-ahead measure fell 2 points to +3% Two-year-ahead CPI inflation expectations jumped 0.9 percentage points to 6.6%, against a backdrop of petrol prices up approximately 30% year-on-year and food price inflation running at 4% to 5% House price inflation expectations eased from 3.8% to 3.2% Only a net 3% of respondents expect to be better off financially this time next year, down 7 points The oil price shock is identified as the clear driver, affecting household budgets directly through petrol prices and indirectly through broader concern about job security and economic conditions The widening gap between consumer inflation expectations of 6.6% and firms' wage expectations of 2.5% is flagged as a key concern, alongside the noted drag on sentiment from expectations of OCR hikes New Zealand consumer confidence has slumped to its lowest level in approximately three years, registering a sharp 20-point fall in the two months since the Middle East conflict began to drive energy prices higher. The ANZ-Roy Morgan Consumer Confidence index dropped a further 11 points in April to 80.3, a reading that puts current sentiment on a par with the difficult conditions of 2022 and 2023, a period New Zealand retailers will not recall with any fondness. The driver is unambiguous. Petrol prices are up around 30% year-on-year, and the squeeze on weekly household budgets is showing up clearly across the survey's key indicators. Current conditions fell to 71.9, the lowest since October 2023, while the forward-looking index dropped to 85.9, a two-year low. Perceptions of the broader economic outlook over the next 12 months fell a striking 23 points to a net -48%, the weakest read in three years, as households grow increasingly worried about what sustained high energy prices mean for jobs and the wider economy. The most alarming single reading may be the personal financial situations measure, which tracks how households feel relative to a year ago. That fell 11 points in April to a net -31%, its weakest since mid-2008. Critically, the oil shock has not yet had time to feed meaningfully into household incomes, meaning this deterioration reflects outgoings rather than earnings. The pressure on budgets is coming through the cost of living, and it has further to run. For retailers, the picture is bleak. The net proportion of households viewing now as a good time to buy a major household item, the survey's most reliable retail spending indicator, fell to -25, its lowest since September 2024. That reading, taken alongside the ANZ's separate Business Outlook survey ( also an ugly negative confidence number ) showing retail sector respondents as the most pessimistic cohort on future activity, points to clear downside risk for spending data in the weeks ahead. Two-year-ahead inflation expectations jumped nearly a