Friday 12th April 2019
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Spending on credit and debit cards fell in March as New Zealanders spent less on big-ticket items like appliances, electronics and hardware.
Seasonally-adjusted card spending fell 0.3 percent in March after rising 0.6 percent in February and 2 percent in January, Stats NZ said.
The decline from February was largely attributed to the fall in durables purchases, down 1.9 percent, or $26 million. Spending on apparel fell $9 million, or 2.9 percent. In the other direction, spending on consumables lifted 0.5 percent, or $11 million, while spending on fuel was up 0.7 percent, or $4.2 million.
“Spending on groceries, fuel, and other necessities was up in the March month, while spending on more discretionary items such as appliances, electronics, and new clothing was down,” retail statistics manager Sue Chapman said.
ASB Bank senior economist Jane Turner said the warm March weather may have weighed on apparel. Spending on durables will likely receive a "second wind" later this year as she expects a recent surge in residential building consents to translate into an increased number of new homes ready to be furnished later this year.
Core retail spending, excluding fuel and vehicle spending, fell 0.2 percent after a 0.7 percent rise in February.
In actual terms, total retail spending using electronic cards was $5.6 billion versus $5.1 billion in February. On the year, spending was 0.7 percent higher. Core retail spending was $4.8 billion versus $4.4 billion a month earlier. On the year it was up 2.0 percent.
Credit card transactions continued to make up more than half of the total at 54 percent in March but were down slightly from February when they made up 54.5 percent of the total.
Calendar 2018 was the first time credit card transactions were a bigger proportion of transactions than debit cards.
February data from the Reserve Bank showed that New Zealanders had $7.428 billion outstanding on credit cards in February, up 2.8 percent from a year earlier.
In the March quarter, however, total retail card spending rose a seasonally adjusted 1 percent after a 0.3 percent decrease in the December 2018 quarter. Core retail spending lifted 1.6 percent from the December quarter when it lifted 0.6 percent.
"The weak result in March follows a robust start to the year and on the whole retail spending growth was robust over the March quarter," ASB's Turner said.
Overall, she said the outlook for retail spending remains "finely balanced."
Tourism spending is likely to continue to grow, albeit at a more modest pace than seen in previous years. Meanwhile, consumer demand remains supported by the tight labour market, historically low retail borrowing rates, and the government’s Families Package.
"However, the soft Auckland housing market, low wage growth and rising petrol prices may limit the pace of household spending growth going forward."
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