Economic confidence

Business confidence

Auckland confidence indices

    
Source: Consumer confidence: Westpac McDermott Miller Consumer Confidence. Index
    Business: NZIER quarterly survey of business opinion (QSBO)

Business confidence is also relatively low, with a number of challenges weighing on businesses’ minds.

Business confidence in Auckland fell to its lowest level since the GFC during the pandemic. Despite a brief recovery, confidence continued to fall through late 2022 and into 2023. After an initial post-election boost, confidence has been on the wane again, with some uncertainty around government priorities and spending plans.

Supply-side issues were the main concern during the COVID-19 period, including both labour shortages and supply chain challenges. Currently, businesses concerns are very much on the demand side, with lower consumer spending and the ongoing impacts of higher interest rates. Weak demand has also led some organisations to reduce staff numbers, and firms are more cautious about hiring and investment.

- Business confidence in the June 2024 quarter was 41%, meaning that a net 41% of firms expect worsening economic conditions in the short-term.
  - This is down from the previous quarter (-25%) but better than the historical low 12 months ago (-81%).
  - Confidence briefly turned positive in the December 2023 quarter following the election.
- Business confidence fluctuated considerably during the pandemic period, with a sharp fall in 2020 and subsequent improvement until late 2021 when Auckland had been at alert levels 4 and 3 for several months during the Delta outbreak.

Sources: Westpac McDermott Miller (Consumer Confidence Index) and NZIER (Quarterly Survey of Business Opinion)

Consumer confidence

Auckland’s consumer confidence is relatively low, reflecting the challenging economic conditions which exist today.

Both consumer and business confidence are strong indicators of the sense of stability and security within an economy. Consumer confidence in Auckland recovered strongly in 2023 and early 2024 but has fallen again in the June quarter.

Consumer spending declined in real terms (controlling for inflation) in the year to March 2024. According to NZIER’s most recent quarterly predictions, the weak labour market, along with increased living costs and mortgage repayments, underpins the downbeat mood amongst households.

Many households are reducing their spending as a result – a concern for many industries, but particularly retail and hospitality.

- Consumer confidence in Auckland was relatively resilient during the COVID-19 period, but hit record lows in 2022 (Q2 and Q4).
- Auckland’s (and the rest of New Zealand’s) consumer confidence had been slowly improving up until earlier this year but has fallen considerably in the most recent quarter (Q2 2024) – this reflects current cost of living pressures for households and the more pessimistic economic outlook.
- Consumer spending was significantly impacted during the pandemic, and has been volatile coming out of it.
  - Spending in Auckland fell by 7% in the year to March 2021, and recovered slightly in 2022.
  - Auckland’s consumer spending grew by 18% in the year to March 2023, reflecting a recovery from COVID-related restrictions, and partly driven by inflation.
  - Spending growth (2.8%) was below the level of inflation (4%) for the year to March 2024.

Sources: Confidence indices – Westpac McDermott Miller (Consumer Confidence Index) and NZIER (Quarterly Survey of Business Opinion). Consumer spending – Infometrics: Quarterly economic monitor

Auckland Economic Monitor

A summary of key economic information about the region

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