Cautious consumers go easy on the plastic as card spending dips in July

Seasonally-adjusted electronic card spending dipped in July by 0.1 percent after being flat in June, according to Stats NZ.

Economists had expected a 0.5 percent lift, according to the median in a Bloomberg poll. In the same month of 2018 spending had increased by 0.2 percent. 

Core retail spending, excluding fuel and vehicle purchases, fell 0.5 percent after rising by 0.3 percent in June. 

The biggest percentage decrease in July was for apparel, down 3.2 percent. Hospitality spending was flat. 

“The soft retail result was consistent with the observed July slide in consumer confidence. What’s more, the soft housing market backdrop and disquieting global scene could still result in consumers maintaining tight control of the purse strings,” said Mark Smith, an economist at ASB Bank. 

Smith added that despite encouragement from the Reserve Bank to spend money, there were a number of headwinds facing consumers. ASB expects the official cash rate to move below 1 percent by the year’s end. 

Fuel was the only retail industry to report an increase, up $15 million, or 2.7 percent. It is the first increase in fuel spending in three months, with the increase "likely due to higher fuel prices at the pump,” Stats NZ retail statistics manager Sue Chapman said. 

In actual terms, retail spending on electronic cards was $5.2 billion in July, up 1.6 percent or $84 million from the same month a year earlier. 

Core retail spending was $4.48 billion, down 0.5 percent from a year earlier.

Cardholders made 147 million transactions across all industries in July with an average value of $49 per transaction.

(BusinessDesk)

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