Retail spending below expectations in September
New Zealand retail spending on electronic cards was flat in September, which economists said was due to cooling house prices.
Seasonally adjusted retail spending on credit and debit cards rose 0.1 percent from August, having dropped 0.2 percent that month, Statistics New Zealand said in a statement. Total spending, including non-retail industries, fell 0.1 percent, having risen 0.6 percent a month earlier.
"Consumer spending has cooled significantly in recent months - in fact, the level of card spending is down since the start of the year," said Westpac chief economist Michael Gordon. "Consumer spending in New Zealand tends to have a strong link with the housing market, and the slowdown in spending is consistent with the cooling in house prices over the last year. In the absence of a renewed fall in interest rates, we expect the housing market, and therefore growth in consumer spending, to remain subdued over the next couple of years."
Statistics NZ retail manager Sue Chapman said the agency was unable to draw "any firm conclusions about the impact of the general election on electronic card spending in September."
Westpac's Gordon said retail spending had risen less than expected, with some of the shortfall due to fuel spending, which gained 0.9 percent despite an estimated 5 percent rise in fuel prices over the course of the month.
Today's figures show credit and debit card spending on durables dropped 1.2 percent and apparel spending fell 1.1 percent. Expenditure on consumables rose for a fourth month, up 0.8 percent.
Hospitality spending decreased 0.2 percent and spending on vehicles excluding fuel dipped 0.1 percent.
Today's figures show actual retail spending climbed 2.9 percent to $4.9 billion in September from the same month a year ago. Card-holders across all industries made 137 million transactions in September versus 139 million in August. The average value was steady at $48.