Christmas Cheer Boosting Consumer Confidence

Westpac-McDermott Miller Consumer Confidence, December quarter 2025

With the holiday season upon us, households’ spirits have picked up. The Westpac-McDermott Miller Consumer Confidence Index rose 5.6 ppts in December, taking it to a level of 96.5. While that’s still a little below long-run averages, this is the highest level of confidence that we’ve seen this year. (Note: A level below 100 indicates that there are more households who are pessimistic about the economic outlook than those who are optimistic.)

“While we often see a lift in households’ spirits at this time of year, there is reason to expect some of that Christmas cheer will continue into 2026,” said Senior Economist Satish Ranchhod. “Increasing numbers of borrowers have been rolling on to lower interest rates. That process will continue into the new year and will help to boost households’ disposable incomes right across the country.”

“Importantly, while we have seen some upwards pressure on borrowing rates recently, most borrowers who are refixing now will still be rolling onto much lower rates,” noted Mr Ranchhod. “For instance, one-year fixed mortgage rates are around 130bps lower than this time last year, while two-year fixed mortgage rates are 220bps lower than in December 2023.”

“Since our last survey, confidence has taken a step higher in most parts of the country, and spending appetites have also firmed,” said Mr Ranchhod. “Spending remains strongest in the lower South Island. But in contrast to the past year, we’re now seeing spending picking up right across the country. That includes Auckland, which is now the most upbeat part of the country.”

“Many households across the country are still dealing with tough conditions,” said Mr Ranchhod. “The cost of living remains a major concern, as does softness in the jobs market. Those challenges will be with us for a while yet. However, we’re starting to see some more encouraging signs in the economy, and hopefully 2026 will be a more positive year for most New Zealand households.”

“Looking across the different demographic groups, there are some clear contrasts. Men are optimistic for the first time this year, with a small lift of 3 points and an index score of 102.6. Women, however, remain pessimistic at 90.6, despite seeing an increase of 7.2 points this quarter. Close to half of women believe they are worse off financially than they were a year ago, compared with just over a third of men. Looking ahead to next year, both men and women have broadly similar expectations for their personal finances. Men, however, are more optimistic than women about New Zealand’s short-term economic future, as well as the country’s longer-term prospects,” commented Imogen Rendall, Market Research Director of McDermott Miller Limited.

“Confidence amongst younger age groups is relatively buoyant, particularly in contrast to older New Zealanders. Confidence amongst those aged 18-29 has lifted by 14.4 points to an index score of 108.2 and amongst those aged 30-49 it has risen 9.5 points to 101. Those aged 50+, however, have seen their confidence increase by just 1.8 points and they remain firmly pessimistic this quarter with an index score of 90.8,” said Ms Rendall.

“Looking at those in paid work, confidence has lifted by 6.4 points this quarter up to 104.7. Those not in paid work experienced the same lift in confidence this quarter, but they are still firmly pessimistic at 86.7. Just under a quarter of those in paid work feel they are better off financially now than a year ago, compared to fewer than one in 10 of those who are not in paid work,” noted Ms Rendall.

The survey was conducted over 1-11 December 2025, with a sample size of 1,550. An index number over 100 indicates that optimists outnumber pessimists. The margin of error of the survey is 2.5%.

Acknowledgement

The Westpac McDermott Miller Consumer Confidence Index is owned by McDermott Miller Limited. Westpac McDermott Miller should be acknowledged as the source when citing the Consumer Confidence Survey and Index. Graphs supplied may be reproduced by the news media provided Westpac McDermott Miller is acknowledged as the source.

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