Friday 11th October 2019
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New Zealanders are still opening their wallets although wet weather dampened some enthusiasm for spring clothing.
Seasonally adjusted electronic card spending lifted 0.4 percent in September after a 1.2 percent rise in August, Stats NZ said. Economists polled by Bloomberg had expected a lift of 0.2 percent.
Core retail spending, excluding fuel and vehicle purchases, rose 0.6 percent after increasing 1.4 percent in August.
"After some very sluggish spending growth in the first half of the year, we may now be seeing the early signs of a resurgence in New Zealanders’ spending appetites," said Westpac Bank senior economist Satish Ranchhod. September was the second month spending was higher than expected.
Ranchhod noted that the lift in retail spending came after the Reserve Bank cut rates by 50 basis points in August and after a pickup in house price growth in recent months.
"This will be a welcome development for the RBNZ who have been looking for signs that reductions in the cash rate over the past year are supporting demand," he said.
However, he still expects the central bank to cut the official cash rate again in November.
"If we continue to see the housing market strengthening and households ramping up their spending, the RBNZ will likely feel more comfortable that they have done enough to support demand as we go into the new year," he said.
Today's report showed spending on clothes and shoes decreased the most in September, down $12 million or 4 percent, partly reversing the 5.3 percent increase in August.
“Sales of spring clothing and footwear may have been dampened by the unsettled cooler weather experienced over the country through September,” retail statistics manager Kathy Hicks said.
Spending on fuel fell 0.6 percent, or $3.7 million, after falling 1.4 percent in August.
Consumers continued to buy groceries and liquor, which lifted 0.8 percent or $16 million from August.
Spending on durable goods, such as electronics, hardware, furniture, and appliances, rose 0.4 percent, as did spending on hospitality.
In actual terms, retail spending on electronic cards was $5.2 billion in September, up 0.3 percent or $15 million versus the same month a year earlier. Core retail spending was $4.48 billion, up 2.1 percent from a year earlier.
Cardholders made 145 million transactions across all industries in September, with an average value of $49 per transaction.
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