Consumer confidence in New Zealand has dropped to its lowest since the peak of recession in early 2009, according to the latest Westpac McDermott Miller quarterly survey.

The survey index fell 11 points to 101, which points to weaker spending in the new year. The NZ Herald reports the drop was an even steeper fall than just after Christchurch's February earthquake, and optimists outnumber pessimists in a very narrow gap.

Only 13 per cent of respondents said it was a good time to buy a big household item, down from a net 30 per cent in September.

"The bad news out of Europe and prognostications about what it might mean for New Zealand have perhaps reached a critical mass in the consumer's mind. People have sat up and taken notice," Westpac chief economist Dominick Stephens said.

Stephens noted the temporary spending boost from the Rugby World Cup was over and it did not help much considering the domestic economy entered a lull in the second half of the year.

"Particularly concerning in this regard is the fact that there was a sharp decline in households' willingness to spend on big-ticket items. This series reached similarly low levels in the 1990, 2000 and 2008 downturns, when consumption growth slowed materially," he said.

Economic uncertainty is making consumers zip their wallets despite falling petrol and food prices, low interest rates, and little change in households' reported financial situation, Stephens added.

Twenty-two per cent of respondents expected bad economic times over the year ahead, up from only 2 per cent pessimistic in September.

The respondents' view of the economic outlook over the next five years also dropped from a high of 41 per cent in September to only 31 per cent in the last quarter. The latest survey yielded the lowest level of optimists since mid-2008.

With regards to their personal financial situation, the respondents' assessment showed no significant changes.

A net 20 per cent said they were worse off than a year ago. But that was not much different three months ago, Stephens said.

Five per cent expected to be better off in a year's time, down from 10 per cent in the September survey.

"This group's expectations for their personal finances have swung from cautious optimism to net pessimism, with a net per cent now expecting their situation to get worse over the coming year - the worst since the early 1990s," says McDermott Miller managing director Richard Miller.

Miller noted a marked confidence difference between urban and rural consumers.

Rural consumers' confidence dropped 18 index points compared with seven points in the big cities and secondary centres, owing to adverse international conditions and wrong Government policies even after the election.