Card spending rises 0.4pc in October

Kiwis spent a total of $3.85 billion through the Paymark electronic network last month. Photo / Thinkstock
Kiwis spent a total of $3.85 billion through the Paymark electronic network last month. Photo / Thinkstock

New Zealand retail spending on electronic cards rose as expected last month, led by fuel, motor vehicle related spending and durables.

Spending on debit, credit and charge cards rose 0.4 percent, seasonally adjusted, in October, following a 0.6 percent decline in the previous month, according to Statistics New Zealand. Core retail, which excludes motor vehicle related spending, gained 0.2 percent.

Consumer related stocks on the NZX 50 Index have been among the biggest gainers this year, with a 35 percent gain based on the NZSE Consumer Index, outpacing the broader market. Briscoe Group has climbed 49 percent this year, while jeweller Michael Hill International is up 39 percent.

The 0.4 percent gain in the latest month matched the forecast in a Reuters survey. Actual sales were up 3.2 percent from a year earlier.

Spending on fuel rose 1.6 percent and spending on durables, which include furniture, hardware and appliances, rose 0.7 percent in October. Consumables, such as food and liquor, fell 0.6 percent following a decline of 0.7 percent in the previous month.

The electronic cards data covers about two thirds of retail spending in New Zealand.

Total electronic card transactions, including those not related to retailing, also rose 0.4 percent.

ASB economist Daniel Smith said the overall trend in card spending is one of steady but modest growth.

"A large part of the recent strength has been in fuel spending, which increased by 12 per cent in August alone, and has held up at that level."

Smith said fuel spending is now 13.7 per cent higher than a year ago when the Rugby World Cup was "in full swing".

"Part of the increase in the value of spending can be attributed to slightly higher petrol prices, but the sheer size of the change in spending still suggests much higher volumes of fuel sales."

Other areas of retail card spending have been more subdued over the last few months, he said.

"With retail spending growth likely to remain modest, we continue to expect that the RBNZ will leave the OCR on hold until September 2013."

- BusinessDesk

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