Thursday 14th January 2016
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New Zealand retail spending on electronic cards fell in December, led by a decline in purchases of durable goods, in a month when consumer confidence dipped.
Spending on core retail, which encompasses consumables, durables, hospitality and apparel, fell a seasonally adjusted 0.4 percent to $4.02 billion in December, Statistics New Zealand said. Including fuel and auto-related items, retail spending fell 0.2 percent.
"Retail spending has trucked along at a pretty solid pace over the course of the last year, supported by strong growth in house prices, a large net inflow of migrants, and solid tourist spending," Westpac Banking Corp senior economist Anne Boniface said in a note. "As we head into 2016 we expect the pace of retail spending will gradually start to slow. Regional centres may feel the impact of ongoing belt tightening by farmers, while in Auckland the slowing housing market may prove a headwind for retail spending."
Card spending on durables, an industry which encompasses furniture, hardware and appliance retailing, fell 1.8 percent to $1.1 billion.
"There could be a number of reasons for this," Boniface said. "It may imply weaker prices in this sector. Alternatively, it could signal that slower turnover in the housing market in recent months, particularly in Auckland, has weighed on spending on durables - or some combination of the two."
Consumer confidence slipped in December according to an ANZ-Roy Morgan survey, which cited an uncertain economic outlook tempering optimism.
Earlier this month, payments firm Paymark said December activity showed strong growth, with the number of transactions up 8.2 percent from a year earlier. Today's data show the number of transactions rose 6.2 percent in December to 143 million from the same month a year earlier, while the value of total spending, which includes services and non-retail industries, gained 5.6 percent to $7.73 billion.
Spending on consumable items increased 0.2 percent to $1.73 billion in the month, while hospitality purchases grew 1.6 percent to $854 million and apparel spending advanced 0.4 percent to $310 million.
Fuel purchases rose 0.4 percent to $596 million in December, and were down 1.2 percent from the same month a year earlier. A glut of oil has driven international prices downwards, sending barrels below US$30 each, with petrol falling below $1.90 a litre in December for the first time since February 2015. Westpac's Boniface said December's rise was presumably driven by growth in volumes
The average value per transactions rose to $54, from $51 in November.
Increasing proportions of the transactions are being made on credit cards rather than debit cards, the figures show. In December 54.3 percent of transactions were made on debit cards, and 45.7 percent on credit; compared to debit making up 55.6 percent of transactions, and credit 44.4 percent a year earlier.
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