Three in five New Zealanders are still concerned about the impact of the Middle East conflict on their finances, despite lower fuel prices, according to Westpac NZ research.
Meanwhile, Westpac insights also show many business sectors are feeling ongoing effects of higher prices and supply chain disruptions caused by the conflict.
A nationally-representative survey of 535 people, conducted on research platform Ideally last Tuesday before hostilities between the US and Iran ramped up again, found 60% of people are still worried about the conflict impacting their bottom line. That's down from 80% and 76% when the same survey was run in March and April respectively.
While only 19% now say they're "very concerned" - compared to 42% shortly after the conflict broke out in March - a further 41% still have some level of concern, and only 5% have no concerns at all.
Westpac NZ Managing Director of Institutional and Business Banking Reuben Tucker says while the situation in the Middle East is volatile, there are signs the conflict will only be a temporary drag on the economy and the bank is working to support a range of customers who are likely to feel the effects for a while yet.
"The flare up in geopolitical tensions over the past few days - and the subsequent rise in oil prices - reinforces that we're still in an uncertain and volatile environment," Mr Tucker says.
"The good news is that as a country we've shown ourselves to be adaptable and resilient through external shocks in recent years, and this episode is no exception.
"These survey results, combined with our internal data, show we've collectively made sensible changes to offset the impacts of higher costs, such as driving less (44% of respondents), changing how we shop for groceries (31%) and deferring planned large purchases (25%).
"Westpac has offered a range of support options to help manage costs, such as interest-free lending on EVs and chargers through our Greater Choices home loan top-up. A small but increasing number of respondents (8%, up from 5% and 6% in March and April) say they've purchased a smaller or more fuel-efficient vehicle in response to the impacts of the conflict."
Mr Tucker says businesses exposed to high prices, including in the transport, manufacturing and Agri sectors, are still reporting tough conditions.
"We're talking to farmers whose fertiliser costs are way over budget, retailers who are still facing subdued consumer demand for their goods, and manufacturers grappling with supply chain issues. These sort of challenges are making businesses cautious about committing to hiring and spending decisions until costs come down.
"We've stood beside those businesses since early March, offering case-by-case support where needed, and will continue to do so.
"Our key advice has been to control the things they can control. That means making sure they have sufficient cash on hand, stockpiling inventory if necessary, and looking for alternative ways to source materials more cheaply.
"There are better signs for some sectors - such as tourism and fast-moving consumer goods - where a slow recovery in household confidence is driving a lift in discretionary spending.
"In other words, people are splashing out on those plane tickets or a new pair of shoes that they might've held back on three months ago.
Mr Tucker says Westpac is encouraged by the number of household and business customers who have taken the opportunity to review their finances in light of higher costs, and encourages all New Zealanders to keep a firm handle on their money situation into the future.
"Anyone who's worried about making ends meet should talk to us. The sooner we're aware of potential issues, the sooner we can help you get back on track and making the most of a hopefully improving economic picture over the rest of the year."
