NZ consumer spending on debit, credit cards falls 0.4%

Tuesday 9th March 2010

New Zealanders spent less on debit and credit cards in February, the first decline in eight months, which may stoke speculation the central bank will be inclined to hold off on raising interest rates until the second half of the year.

The value of electronic point of sale transactions fell 0.4%, seasonally adjusted, last month, after rising by the same amount in January, according to Statistics New Zealand. Core retail sales, which exclude motor vehicle related industries, fell 0.2%.

Retailers including Warehouse Group reported weaker-than-expected sales over the peak Christmas period and today clothing chain Postie Plus Group reported a first-half loss and said consumer confidence “remains fragile but is improving.” The nation’s jobless rate has topped 7% and signs are that the housing market is faltering, encouraging consumers to spend less.

“Today's outturn points to consumer spending remaining subdued, and the recovery in household spending perhaps being more gradual than we had been expecting,” said Christina Leung, economist at ASB.

The card data covers about two-thirds of New Zealand’s retail sales, though doesn’t capture cheque and cash transactions.

Businesswire.co.nz

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