Retail spending on debit, credit cards picks up in November
New Zealand retail spending on electronic cards picked up in November, driven higher by spending on hospitality and clothing.
Spending on core retail, which strips out fuel and vehicle purchases, increased a seasonally adjusted 0.4% in November, from a 0.1% gain in October, Statistics New Zealand said. On an annual basis, core retail spending rose 4.9%, the agency said.
Consumer spending is being underpinned by a combination of record low interest rates and an expanded population due to record high migration and tourism levels. Still, a slowing labour market, falling dairy prices and subdued consumer confidence are weighing on the outlook.
"On balance, we expect the boost to spending from population growth and tourism to outweigh these downside risks," ASB economist Kim Mundy said in a note. "As a result, we expect spending growth to remain modest heading into 2016."
Spending on apparel increased a seasonally adjusted 3.6% in November, following two months of declines. Meanwhile, hospitality spending rose 2.7%, following a 0.1% advance in October, while spending on consumables gained 0.2%, slowing from a 0.9% pace last month.
In contrast, spending on durable goods declined 2.2%, the biggest monthly fall since February 2011, when it dropped 2.4% following the Christchurch earthquakes.
"Coupled with signs of a slowing housing market, this is something we will be monitoring over the next few months," ASB's Ms Mundy said. Durables spending includes furniture, hardware and appliance retailing, as well as pharmacy, cosmetic and toiletry retailing.
Total retail sales, which includes fuel and vehicle sales, edged up 0.3% to $4.79 billion, for an annual gain of 3.7%. Total sales, which includes services and non-retail industries, advanced 0.2% to $6.37 billion, for an annual gain of 4.5%.
There were 127 million transactions on electronic cards in November, up 4.9% from a year earlier. The average value of transactions was $51, with 54% put on to debit cards and the remainder going on to credit. Electronic cards make up 67.9% of core retail sales, and 61.5% of total sales processed in New Zealand.