Credit spending, debit cards slips in April
New Zealanders spent less on their electronic cards in April, ending nine consecutive monthly gains, as a dropoff in spending on durables weighed on an otherwise flat month.
The value of core retail spending, which strips out spending on fuel and vehicle related items, fell 0.8% in April, the first time the measure has fallen since last June, Statistics New Zealand said. On an annual basis, the measure rose for the fifth consecutive month with electronic card spending up 6.4% from March a year earlier. Total retail spending rose 0.3% in the month while on an annual basis it fell 0.7%, reflecting the sharp decline in global oil prices last year. (See graph below)
"Today's numbers were weaker than expected and suggest that some of the super-strong growth in spending in the March quarter was a one-off," Felix Delbruck, senior economist at Westpac Banking Corp said in a note. "With other relevant factors – including migration, jobs growth, house price gains, and consumer confidence – all continuing to be very favourable, we would not be at all surprised to see retail card spending regaining momentum in coming months."
Spending on durables recorded the biggest drop last month, down 1.2% to $1.13 billion, while consumables fell 0.4% to $1.67 billion. Hospitality spending on debit and credit cards was flat, after eight consecutive monthly gains while spending on apparel edged up 0.1%.
"A strong summer tourist season which boosted hospitality spending (particularly in February, possibly reinforced by the Cricket World Cup) has now come to an end," Delbruck said. "Petrol prices have been rising, unwinding some of the boost to consumers' purchasing power that occurred over the summer when fuel prices plunged."
On an annual basis, all four core retail measures rose. Hospitality spending jumped 11.2% compared to the same month a year earlier. Consumables rose 5.6%, Durables rose 5.2% and apparel gained 3.4%.
In actual terms, cardholders made 119 million transactions across all industries in April, with an average value of $50. The total amount spent across all the transactions was $5.9 billion.
The total value of all electronic card spending, including services and other non-retail industries, fell 1.1% in April, following a 1.2% gain in March.