The Westpac McDermott Miller consumer confidence index fell one point to 109.6 in the March quarter. This is below the average of 111.5.
Westpac senior economist Satish Ranchod said in his report that the start of 2016 saw a barrage of bad news hitting headlines, with much of them related to the global economy deteriorating and the tough times ahead for exporters.
“These developments have clearly made households nervous about where the economy is heading,” Ranchod says.
Only 1.4 percent of the respondents in the survey were optimistic about the one-year economic outlook, down 7.7 percent from December.
A further 16.8 were upbeat about the five-year outlook, while 3.2 percent said their current financial situation was worse than a year ago.
However, it wasn’t all bad news: 26.7 percent thought now was a good time to buy major household items.
Ranchod says low interest rates were why people had an appetite to spend, along with an imporving labour market.
He says consumer spending falling is not something businesses should be getting concerned over – yet.
"Households' more upbeat assessment of their personal economic conditions means that even though they're nervous about the outlook in general, it's likely that they will remain in the mood to spend (at least for the time being)," Ranchod said.
Interestingly, Aucklanders were found to be more more upbeat than their regional counterparts.
The survey was conducted between March 1 and 11.