New Zealand consumer confidence experienced a 1.8 percentage point decline in March, taking it to 94.7 from 96.5 in December, according to the Westpac-McDermott Miller Consumer Confidence index released Wednesday.

There is increased concern about the outlook for the economy, with a level below 100 indicating that a greater number of households are pessimistic about economic conditions compared with those who are optimistic.

The present conditions index was up 87.9 from 86.1 as a rising number of households reported improved financial conditions over the past year, but conditions have now been overtaken by more worrying global events, as the war in the Middle East broke out, the report said.

The expected conditions index fell to 99.2 in March from 103.4 in December.

A prolonged conflict will lead to increased disruptions in economic activity and heightened financial pressure on households, potentially resulting in declining confidence in the coming months, according to the report.