Consumers are demonstrating none of the lack of confidence emanating from the business community, though the growth of annual spending is slowing compared with the past decade.
New figures from Stats NZ show electronic card spending across all six retailing sectors rose a seasonally adjusted 0.8% in June. This follows a 0.6% increase in May.
However, the June quarter figures produced a mixed result – three sectors rose and three fell.
Retail statistics manager Sue Chapman says all sectors rose in June, the biggest increases being clothing and footwear (1.5%); fuel (1.3%); food and liquor (0.6%); and furniture, hardware and appliances (0.5%).
“The pick-up in spending on clothing and footwear could be attributed to the start of winter,” she says.
Core retail spending (which excludes the vehicle-related industries) rose 0.6% in June 2018, after a similar increase (0.6%) in May.
Actual retail spending using electronic cards was $5.1 billion in June 2018, up $238 million (4.9%) from June 2017.
Annual and quarterly trends
The largest fall in the June quarter came from consumables (grocery and liquor retailing), down $36m (0.6%). This follows an $88m (1.5%) rise in the March quarter.
The durables industry, which includes hardware, furniture, and appliances, rose $26m (0.7%). This follows a 1.4% rise in the previous quarter.
Core retail spending (which excludes the vehicle-related industries) fell 0.2% after a 1.8% increase in the March quarter.
In actual terms, retail card spending was $15.0b, up $518m (3.5%) from the June 2017 quarter.
JP Morgan economist Ben Jarman says the total retail card spending is increasing 4.4% on annual basis, while core spending is running at a softer 3.5%.
"Both are below the average pace of the past 10 years, which is striking given that population and labour supply growth are still so strong," he says.
"Visitor arrivals have dropped off quite sharply in annual terms, which is likely to have been a drag, but restrained per-capita spending by the resident local population is also a factor (for example, in durables)."
Westpac senior economist Satish Ranchhod says retail sales will continue to slide.
"Looking ahead, we expect that spending growth will remain weak over the remainder of the year," he says.
"In large part this is due to the impact of policy changes aimed at cooling the housing market, which will have flow-on effects for household spending. We also expect to see population growth moderating from current very high levels."
Note: Values are only available at the national level, and are not adjusted for price changes.
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