High expectations of more of the same

Concerns about the economy, and household confidence, remain strong at present. Despite falling interest rates, a number of households costs are rising at an accelerating rate, and higher unemployment is worrying all.

These various economic forces seem to be broadly balancing each other out, with our Chart of the Month showing the highest level of households expecting the same, unchanged economic outlook over the next 12 months in a decade.

Most know the 1News Verian poll (previously the Colmar Brunton poll) for its political poll results. However, the poll – which has been running since 1974 – also asks about household expectations for the economy in 12 months’ time. The August 2025 poll showed a decline in the share of households expecting better economic conditions in a year, compared to the May poll - from 41% in May to 36% in August (see Chart 1).

However, the decline in households expecting better conditions wasn't because households expected worse conditions - that measure was stable at 21%, the same as in April and May. Instead, the share expecting the same conditions rose to 43%, the highest result recorded for an unchanged economic outlook since September 2015.

So, although New Zealanders don’t seem to be increasingly feeling like the economy is going to get worse, they can’t see things getting any better any time soon either.

Usually, households have a more determined view of the next 12 months for the economy. Either it will be better than currently, indicating optimism for the future, or it will be worse than at present, signalling pessimism.

The recent figures show that this unchanged economic view has been held more strongly since the start of 2025, with results in the high 30s and low 40s in the February, April, May, and August results. The high rate of unchanged expectations is unusual, with only a handful of occasions where this result recorded more than 40% of household expectations. Apart from the fleeting spike in “same” responses in 2015 (for just one anomalous poll) and again as one-off results in 1996 and 1984, you have to go back to 1981 before you saw more than one result at a time where 40% or more of households reported unchanged economic expectations, or before that into the mid-1970s.

With continued forecasts of improving economic conditions late in 2025 and into 2026, as mortgage rates for households refix lower and a slow labour market pick-up begins, we’d expect to see household expectations adjust.

But the strong view of an unchanged economic outlook may hamper the economic recovery – if households aren’t expecting better economic conditions, they may hunker down more, for longer, and take a more conservative approach to spending.