Electronic card transactions edge lower in February

Photo / Amos Chapple

The value of transactions made using electronic cards slipped in February, with flat or declining sales in all but one core retail industry, along with a fall in fuel sales and in non-retail industries.

Figures published by Statistics New Zealand (SNZ) today show the value of core retail transactions, which exclude the vehicle-related industries, edged down a seasonally adjusted 0.2 per cent compared to January, when core retailing also slipped 0.2 per cent.

That reflected flat or falling sales in all the core retail industries, except consumables such as food, liquor, and chemist retailing, which rose 0.8 per cent, SNZ said.

The actual value of transactions in the core retail series was up 2.6 per cent from February 2009.

"Today's data reinforces a cautious consumer," said Goldman Sachs JBWere economist Philip Borkin.

He said he had expected further recovery in consumer spending over the first half of this year, supported by growing migration and "pent-up" demand for durable goods.

"However, the underlying trend appears more subdued and one where consumers are reluctant to open their wallets," said Borkin.

From the Reserve Bank's point of view, in reinforced that despite policy support, there was "limited evidence of a return to our borrow and spend ways of old."

This left him "biased towards" the first raising of the Official Cash Rate being pushed out to later in the year than the current June forecast.

Reserve Bank governor Alan Bollard is expected to leave official interest rates on hold this Thursday.

For all the retail industries seasonally adjusted electronic card transactions fell 0.4 per cent, with a 1.3 per cent fall in fuel retailing which had been the main contributor to rises in the series between August and January.

When non-retail industries were included, the total value of transactions dropped 0.3 per cent.

The non-retail industries, which include services such as travel and health, and wholesaling, dropped 1.3 per cent in February.

It was the first drop in the total value of transactions in eight months, although in November no change was recorded.

Electronic card transactions were seen as an indicator of consumer spending. They cover around two-thirds of retail sales but SNZ cautioned they should not be used as an indicator of the whole retail sector.

- NZPA with NZ HERALD