Food, liquor and fuel lifts Jan card spending

Photo / NZ Herald
Photo / NZ Herald

New Zealanders lifted spending on their credit, debit and charge cards last month, led by consumables such as food and liquor, and fuel.

The value of electronic card spending in retail industries rose 0.3 per cent, seasonally adjusted, in January from December, the fourth straight gain, according to Statistics New Zealand.

Core retail spending, which excludes motor vehicle-related industries, also gained 0.3 per cent.

The figures indicate momentum in spending continued in January, after what is forecast to have been a 1.1 per cent gain in the volume of sales in the fourth quarter of 2012. That data is released on Friday. A Dun & Bradstreet survey released last month showed four in 10 people planned to raise their credit limit during the next three months.

ASB economist Daniel Smith said the trend in the electronic card measure of consumer spending continues to be one of gradual growth.

He said part of the recent upturn in consumables card spending could be attributable to the turnaround in net migration; positive inflows will place upward pressure on spending in the core retail categories.

"The January increase in retail card spending continues a trend of steady growth," said Smith. "Although several categories showed small declines in spending for the month, the ongoing strength in spending on consumables is a reassuring sign - growth in that category seemed to be slowing over the middle of the year. Positive net migration flows over late 2012 will add further impetus to consumer spending, especially if they are sustained over 2013."

Westpac Bank economists said this mornings card spending numbers showed consumer spending was "back onto the modest upward trend of the last few years, shaking off its September quarter soft patch."

While nominal spending was growing only slowly, subdued price pressures (and indeed falling retail prices) was helping to lift spending in real terms.

Westpac expects quarterly retail sales figures due to be published on Friday to show a 2 per cent bounce.

Paymark, which handles about three-quarters of the country's electronic transactions, said yesterday the value of transactions rose 5.1 per cent to $3.96 billion in January from the same month a year earlier, while the number of transactions climbed 6.3 per cent to 79 million. That's a faster rate of growth than the 2.3 per cent increase in the value of spending in December and the 3.6 per cent gain in transactions.

Total card spending rose 0.4 per cent in January. In unadjusted terms there were 107 million transactions last month, with an average value of $52 for a total of $5.6 billion.

Spending on consumables rose 0.8 per cent in the latest month while spending on fuel climbed 1.9 per cent. Vehicles excluding fuel fell 0.1 per cent.

Meanwhile, in a further sign that business conditions are improving, a Dun & Bradstreet survey released today shows the time firms take to pay their bills has dropped by a week over the last year to a near record-low of 40.1 days.

"Almost three in five invoices (58 per cent) were paid on time in the December quarter, up 11 per cent year-on-year, while the number of invoices paid more than one day late dropped by 28 per cent over the same perio," D&B said.


- BusinessDesk

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