BUSINESSDESK: New Zealanders ramped up spending on their plastic cards last month after a record spike in expenditure at the petrol pump.
The seasonally adjusted value of total retail industry transactions on electronic cards rose 3% to $4.27 billion in August, Statistics New Zealand says. Spending on fuel jumped 11% to $689 million, its biggest monthly increase since the series began a decade ago.
"Part of this is likely to reflect the steady increase in petrol prices over the month," ASB economist Jane Turner says. "We estimate petrol prices increased around 6 percent over August, which suggests there was an increase in sales volume of petrol as well."
Local retailers have had to contend with softer household demand in recent years as historically low interest rates and persistently high unemployment encourages people to repay debt rather than ramp up spending.
Statistics NZ says other vehicle related expenses rose 0.8% to $114 million in August. That comes after figures showed consumer spending in the second quarter was underscored by record expenditure on cars and auto parts.
New Zealand's total core spending on electronic cards, which excludes motor vehicle-related industries, rose 1% to $3.46 billion, boosted by an increase across all industry groups. The largest increase in card spending was on consumables up 0.8% or $12 million to $1.52 billion.
Ms Turner says the figures supported growing consumer confidence in recent months and is likely to be supported by a rising number of house sales.
"While the substantial increase in retail card spending over August was largely driven by higher spending on fuel as petrol prices increased over the month, there are also encouraging signs of an improvement in underlying household spending."
The total value of electronic card spending, including services and non-retail industries, rose 2.4% to $5.62 billion. Unadjusted spending on electronic cards advanced 6.3% to $5.48 billion in August.