Friday 10th May 2019
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Spending on credit and debit cards increased in April as people took advantage of the extended holiday period to travel and eat out more.
Seasonally-adjusted card spending increased 0.6 percent in April after a 0.2 percent dip in March, Stats NZ said. Core retail spending, excluding fuel and vehicle spending, was up 0.5 percent following a 0.3 percent decline in March.
The increased spending coincided with a later Easter and school holiday period, which fell in the second half of April this year, having been across March and April in 2018.
“Many employees took three days off to get a 10-day holiday over the Easter and Anzac Day period,” retail statistics manager Sue Chapman said.
Spending on consumables rose 0.5 percent, or $9.9 million, to $2.05 billion while spending on hospitality was up 0.6 percent, or $6.3 million, at $1.08 billion.
Bank of New Zealand senior economist Doug Steel said the number was slightly weaker than he expected but "it is very difficult to trust these numbers as an indicator of trend given the coinciding of a number of holidays" may have distorted spending.
Chapman said the lift was also driven by fuel spending "due to climbing fuel prices". Fuel prices increased for the fourth consecutive month and spending on fuel rose 2.8 percent, or $17 million, to $606 million.
ASB Bank senior economist Mark Smith said the 25 cent per-litre climb in petrol prices since January will likely weigh on household budgets and may prompt households to cut their discretionary spending.
"Households may also cut back on vehicle use, where it is more practical to do so," he said.
Smith expects a moderate rate of consumer spending growth as tourism spending is likely to expand at a slower pace.
Historically-low retail borrowing rates and the government’s Families Package will support consumer demand, he added. However, the soft Auckland housing market, low wage growth, slowing employment growth and rising petrol prices may limit the pace of household spending growth going forward, he said.
The Reserve Bank this week said softer household spending was among reasons for its decision to cut the official cash rate by 25 basis points to a record low 1.5 percent. Members of the monetary policy committee agreed "given the recent weaker domestic spending, and projected ongoing growth and employment headwinds, there was a need for further monetary stimulus to meet its objectives," it said.
April spending on durables - which includes electronics, whiteware, hardware, and furniture - lifted 1.3 percent, or $17 million, to $1.31 billion.
In actual terms, cardholders made 144 million transactions across all industries, down from 156 million in March. The average value was $49 per transaction, up from $48 in March.
Total actual retail spending using electronic cards was $5.3 billion versus $5.6 billion in March. Spending was 4.5 percent higher than in April 2018. Core retail spending was $4.6 billion versus $4.8 billion a month earlier. On the year it was up 5.6 percent.
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