NZ credit, debit card spending up 1.2pc

Photo / Thinkstock
Photo / Thinkstock

New Zealanders spent more on their credit and debit cards in May for a second month, with more cash going towards fuel.

The seasonally adjusted value of total transactions on electronic cards rose 1.2 per cent to $5.54 billion, according to Statistics New Zealand. Spending on fuel rose the fastest in the month, up 4.6 per cent to $644 million. Core retail spending, which strips out vehicle-related expenses, rose 0.8 per cent to $3.42 billion.

Spending on durable goods rose 1.1 per cent to $1.01 billion, while apparel climbed 3.6 per cent to $281 million and services rose 3.4 per cent to $173 million. Spending on hospitality increased 0.9 per cent to $618 million in May.

The recovery in consumer sentiment has been a slow one since the 2008 recession, with the latest ANZ Roy Morgan consumer confidence survey showing a trend of "modest improvement." Total retail sales fell 1.5 per cent in the first three months of the year as people spent less at supermarkets, grocery stores and on accommodation and fuel after splashing out during the Rugby World Cup.

"The May result was stronger than expected, especially given a similar level of strength was seen in April," ASB economist Daniel Smith said in a note. "While the household sector is recovering and private demand is growing slowly, we do not see this sector as a source of inflationary pressure in the near term."

New Zealanders increased their electronic card spending on vehicles 1.4 per cent to $111 million.

Spending on consumable goods slipped 0.1 per cent to $1.5 billion, ending five months of strong gains.

Unadjusted total spending on electronic cards jumped 6.5 per cent to $5.48 billion. That was a slower pace than the 6.9 per cent increase in the number of transactions to 106 million.

Credit card use continued to decline, falling to 42.6 per cent as a proportion of total spending, the lowest level since August.

- BusinessDesk

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