The Westpac McDermott Miller Consumer Confidence Index fell 7 points in March to a level of 92.1 as rising prices and Omicron concerns push consumer confidence to its lowest level since the 2008 Global Financial Crisis.
An index number below 100 indicates that there are more New Zealanders who are pessimistic about the economic environment than there are those who are optimistic. Households reported that their financial position has deteriorated as inflation has started to bite, the survey found.
"New Zealand is being buffeted by a range of powerful economic headwinds," said Westpac's acting chief economist Michael Gordon.
"Many households have reported that their financial position has deteriorated over the past year, and a growing number expect their finances will come under pressure over the months ahead.”
One of the biggest concerns for households had been the rapid rise in the prices of many household goods, which has far outpaced the growth in wages.
"In particular, increases in the prices of food and fuel have siphoned a large amount out of households' wallets, and that is squeezing spending in other areas,” noted Gordon.
Confidence is at low levels in every part of the country and the rapid spread of Omicron was also likely to have dampened confidence in recent weeks.
Confidence also fell sharply for younger people, the survey found. The index number for ages 18-29 fell below 100 for the first time since the beginning of the pandemic with a large drop of 15.2 points to 91.9.
Households also reported they have become increasingly apprehensive about making major purchases. The number of households who think it's a good time to buy a major household item has now fallen to its lowest level in 14 years.