NZ Households Steady Amid Oil Price Strains Ahead of RBNZ Decision

New Zealand households remain cautious but increasingly optimistic about their future prospects, according to the latest consumer confidence data from ANZ-Roy Morgan. The August reading shows a near-flat result, with households still feeling strain from earlier oil price shocks, but seeing current pressures as temporary rather than structural.

The headline index slipped 1 point to 98.0 in August, holding below the neutral 100 mark but well clear of its April low. Current conditions eased from 88.5 to 83.4, while future conditions rose to 107.7, widening the gap between how households feel now versus what they expect ahead.

A net 21% said they were worse off than a year ago, though a net 22% expect to be better off next year, the strongest such reading since January. The five-year outlook rose to +13%, its best level since May 2021, suggesting households increasingly see recent difficulties as temporary.

The Reserve Bank is set to make a key decision on September 2, with economists broadly split between a hold and a further 25 basis point hike to 2.75%. Household inflation expectations held at 4.7%, still well above target, while house price expectations eased slightly.