Tuesday 12th February 2019
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New Zealanders racked up more on their credit cards in January with increased purchases of durable goods and big-ticket items.
Core retail spending on credit and debit cards rose a seasonally adjusted 2.2 percent in January, reversing the 1.7 percent decline reported in December, Statistics New Zealand said. Including petrol and vehicle-related spending, purchases were up 1.8 percent.
That was led by a 5.1 percent lift in spending on durable goods, such as hardware, appliances, and furniture. Spending was up across all categories except fuel, which was down 0.5 percent in the month.
"Spending in the durables industry bounced back from the December 2018 month," retail statistics manager Sue Chapman said in a statement. "A lag in processing of transactions may have contributed to the December and January movements."
A number of retailers have given a fairly subdued assessment of the Christmas-New Year trading period, which is one of their most important sales periods. That is despite consumer confidence surveys remaining upbeat with people stating their willingness to buy big-ticket items such as furniture and whiteware.
Today's data also shows more of those purchases were made on credit. Just over 54 percent of January's transactions made on credit cards, the highest proportion since Stats NZ started tracking the breakdown in 2002.
Calendar 2018 was also the first time credit card transactions were a bigger proportion of transactions than debit cards.
That follows on from Reserve Bank data last month showing 32.4 percent of total credit limits were outstanding at the end of December, the highest proportion since the central bank started collecting that data more than a decade ago.
Today's card spending data show total retail purchases rose $5.52 billion in January, up 3.5 percent from a year earlier. Spending on durable goods was up 6.2 percent from a year earlier at $1.28 billion, while consumables rose 5 percent to $2.04 billion.
Including services and non-retail industries, spending on electronic cards increased 4 percent in January to $7.33 billion from a year earlier.
Westpac economist Satish Ranchhod said the size of today's increase affirmed his view that the December spending decline was overstated.
"While the retail sector has lost some steam over the past year, what we’re looking at is a moderation in growth after strong gains in recent years - rather than a sharp slowdown as had been feared," he said.
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