Growth in spending on credit, debit stalls in March after Feb gains; apparel drops

ASB economist Daniel Smith

New Zealand spending growth on credit and debit cards stalled in March, as a decline in expenditure on fuel and clothing offset gains for food and liquor.

The value of retail spending on electronic cards was unchanged, seasonally adjusted, at $4.6 billion last month, after gaining 0.8 percent in February, according to Statistics New Zealand. Core retailing, which excludes spending on fuel and auto-related items, gained 0.1 percent to $3.7 billion, while the value of total electronic card purchases, including services, fell 0.2 percent to $6 billion.

Spending on apparel declined 2.4 percent to $287 million in March, down from February's 2.1 percent rise to $294 million. Durables spending fell 0.1 percent to $1.1 billion and fuel spending declined for a third month, down 1.7 percent to $730 million.

Flat spending on cards "is not a great surprise given that there was quite a strong increase in spending in the previous month," ASB economist Daniel Smith said in a note. "March card spending is likely to have been affected by good weather delaying winter clothing purchases."

The gain in core retail spend was buoyed by an increase in hospitality spending of 0.5 percent to $722 million while consumables spending rose 0.4 percent to $1.6 billion.

Vehicle spending rose for a second month up 2.8 percent to $134 million. Expenditure on services rose 3.1 percent to $215 million.

"Elsewhere, steady growth in spending continues," Smith said. "Strong consumer confidence and population growth should continue to drive greater consumption over 2014."

Non-retail industries card spending slipped 0.9 percent to $1.26 billion, the second monthly decline.

On an unadjusted basis, total spending on electronic cards rose 5.3 percent to $6.16 billion from the same month a year earlier.

There were 119 million transactions in March, worth an average of $52. About 54.6 percent of all transactions were on debit cards, with the remainder on credit. Electronic card transactions account for about two-thirds of all retail spending.

(BusinessDesk)

 

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