Confidence of households stuck on downward spiral

Households’ confidence in their region’s economy remains low, with Auckland confidence plummeting more than any other region in the June quarter, Westpac says.

Westpac acting chief economist Michael Gordon said the Westpac McDermott Miller regional economic confidence survey showed households across the country continued to battle cost-of-living increases, while falling housing prices also weighed on sentiment.

All regions were in pessimistic territory over the quarter with households’ economic confidence in their regional economy plummeting the most in Auckland, he said. Net confidence in Auckland fell from -6% to -37%, meaning it had both the lowest confidence in the June quarter, and the greatest decline in confidence since March.

Regional economic confidence reflects the difference between the percentage of survey respondents who expect economic conditions in their region to improve and those who expect prospects to worsen over the year.

Otago was the least pessimistic and saw the biggest improvement for the quarter. Its regional confidence increased from -19% in the first quarter to -2% in the second.

Meanwhile, ASB’s regional economic scoreboard ranked Canterbury, Tasman and Nelson as the top three performing regional economies for the March quarter.

Canterbury had been helped by its resilient housing market, ASB said.

Labour market data continued to stay strong with unemployment at a record low of 3.2% in the first quarter, while an annual wage increase of 3.1% represented the highest wage growth since the global financial crisis, ASB said.

‘‘And we expect it to stay on the rise for most of 2022.’’