Monday 12th February 2018
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New Zealand retail spending on electronic cards gained in January for a fifth straight month, as consumers spent more on eating out, hardware, furniture and appliances.
Seasonally adjusted total retail spending on credit and debit cards increased 1.4 percent in January from December, the biggest monthly gain since January 2017 when card spending lifted 2.3 percent, Statistics New Zealand said in a statement. Core retail spending, excluding fuel and vehicles, advanced 1 percent.
Spending rose across four of the six retail industries. Hospitality spending increased 1.5 percent as people spent more in bars, cafes, restaurants and takeaway shops. Durables spending rose 1.2 percent, fuel spending increased 1.5 percent and spending on consumables edged up 0.3 percent, Stats NZ said. Bucking the trend, apparel spending slipped 0.1 percent while spending on vehicles excluding fuel dipped 0.6 percent.
"New Zealand households started the year off with a bang," said Westpac Banking Corp senior economist Satish Ranchhod. Westpac had expected a 0.6 percent gain, while the market consensus was for a 0.5 percent lift.
"January’s strong rise in spending was underpinned by a lift in durable spending," Ranchhod said. "Stats NZ has attributed this to spending associated with increased purchases of ‘back to school’ supplies, which increasingly include electronic devices. However, we have also seen a second-wind in the housing market that is likely to have boosted spending on durable items. Spending on hospitality was also up, suggesting that New Zealanders were getting out and taking advantage of the hot weather at the start of the year."
Westpac expects to see continued strength in spending in the early part of 2018 as mortgage rates edge down and on renewed strength in the housing market.
However, Ranchhod said this strength is expected to ease back somewhat over the year due to a gradual easing of population growth from current strong levels and a cooling in housing demand due to new government policies which will dampen growth in consumer spending.
Today's figures show actual total retail spending climbed 3.4 percent to $5.3 billion in January from the same month a year earlier. Card-holders across all industries made 141 million transactions in the month, down from 161 million in December but ahead of the 133 million transactions recorded in January last year. The average value of $50 was unchanged from January last year, but down from $53 in December.
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