Kiwis tighten belts on household spending

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New Zealanders are sticking to tight everyday household budgets but spending more on home building and renovations, according to latest spending figures.

The Paymark Consumer Index, which covered all electronic transactions through the Paymark network, showed seasonally adjusted card spending was down over July in all areas except housing.

Housing-related spending of $303 million was 5.3 per cent higher than for the same period last year.

Discretionary spending, which included the likes of travel companies, pharmacies, gyms, and doctors, took a sharp 2.7 per cent fall from June.

Total spending in this category was $515 million, down from $529 million the previous month.

This was partly due to to the month having five Sundays, the weakest shopping day of the week, but also due to a halt in spending momentum.

Similarly, spending was down in the hospitality sector from $387 million in June to $372 in July.

This represented a fall of 3.8 per cent from June and 1.5 per cent from July 2011 figures.

The lack of extra inflow of international tourists from last winter's Rugby World Cup would be a factor, but the drop in hospitality spend was also due to weak domestic expenditure.

Most notably, total spending was down sharper than usual in Auckland during the July school holidays.

Non-discretionary spending, which included supermarkets, meat and fish vendors, petrol stations and power companies, was down to $1,461 million from $1,472 million.

This was a 0.8 per cent dip from June, but represented 2.9 per cent annual growth.

The one consistent contributor to growth remained the housing sector.

Spending through outlets loosely linked with the house building and renovation sector, such as home decorating, hardware, and plumbing, increased 0.5 per cent in July and 5.3 per cent on last year.