Consumer spending on debit, credit cards falls in June

Thursday 9th July 2009

New Zealand retail spending on debit and credit cards had the steepest decline since November last month, led by a drop in purchases of furniture and appliances.

Retail transactions on credit and debit cards fell 1% in June, the first decline in five months, following a 0.7% gain in May, according to Statistics New Zealand. Transactions at core retailers, which exclude auto-related sales, sank 1.2% in the latest month after rising 1.1% in May.

The electronic card figures are an early heads up for retail spending, accounting for some 75% of all spending through the core retail sector. The drop off may suggest consumers are conserving their funds to pay debt amid rising unemployment and weaker property values.

The NZSE Consumer Index, which includes retailers, fell 0.3% today.

Reserve Bank Governor Alan Bollard last month kept the official cash rate unchanged at 2.5% and said rates would probably stay low until the second half of 2010. The central bank expects the economy won’t start to emerge from recession until the final quarter of this year, marking the worst economic slump in 30 years.

Total electronic card transactions fell 0.4% in June.

Statistics New Zealand is scheduled to release retail sales for May on July 13.

Businesswire.co.nz

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