Sharechat Logo

NZ plastic card spending jumps in January as credit appetite increases

Monday 13th February 2017

Text too small?

New Zealanders ramped up spending on plastic cards in January after a more subdued end to 2016 and continued to lean more heavily on their credit cards. 

Retail spending rose a seasonally adjusted 2.7 percent in January after two months of zero movement, the biggest monthly gain since December 2006, with increases across all six industries, Statistics New Zealand said. Stripping out vehicle-related spending, core retail sales rose 2.5 percent in the month led by a 3.1 percent increase in durable items.

"The lift in retail card spending in January was across the board, from food and liquor to clothing, petrol, and cars, as well as a bounce back for furniture, hardware, and appliances," business indicators senior manager Neil Kelly said in a statement.

On an unadjusted basis, retail spending was 5.6 percent higher than a year earlier at $5.13 billion in January, with spending on fuel up 10 percent to $628 million as global oil prices rose from their lows and a 9 percent increase in hospitality spending to $1.02 billion. Total card spending, which includes services and non-retail sectors, was up 5.3 percent to $6.73 billion. 

The proportion of spending on credit cards was 49.6 percent in January, the first time it's been above 49 percent since Statistics NZ started measuring the ratio in October 2002, and marking the seventh month of a growing proportion of spending on credit. 

Westpac Banking Corp economist Satish Ranchhod said the increase was "well above market estimates" with a "very positive" outlook for retail spending in the year ahead. 

"Population growth remains strong, employment is up, and we continue to see strong tourist inflows," he said in a note. "With interest rates still relatively low, and a range of other supportive factors in play, we expect that spending will remain firm for some time yet."

BusinessDesk.co.nz



Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.
Bookmark and Share   Printable version
Related News

NZ wool market improves at weekly auction
Spark chases quantum leap in 2019 earnings in latest transformation
Steel & Tube annual profit drops 22% in 'highly competitive' construction sector
CBL says 1H earnings dropped 36% due to increased reserves
UPDATE: Spark annual profit climbs 13% as sales tick up, chairman Verbiest signals exit
IkeGPS raises $3.7 million in placement, plans another $1.3 million raise
August 18th Morning Report
FIRST CUT: Spark annual profit climbs 13% as sales tick up, chairman Verbiest signals exit
NZ dollar dips as rumour of White House departure, Spanish terror attack sap risk appetite
While you were sleeping: Trump unsettles Wall St

IRG See IRG research reports