Kiwis bump up their card spending

By Ben Chapman-Smith

New Zealanders spent more on furniture and appliances last month, which an economist said corresponded with the increase in house sales. Photo / Wairarapa Times-Age
New Zealanders spent more on furniture and appliances last month, which an economist said corresponded with the increase in house sales. Photo / Wairarapa Times-Age

New Zealanders spent more on furniture, appliances, food and liquor last month as electronic spending rose for the fifth consecutive month.

Statistics New Zealand released figures today showing the value of retail spending rose by 0.8 per cent from January to February, when adjusted for seasonal effects.

"There was increased spending in half of the retail industries in February," said Statistics NZ spokesperson Blair Cardno.

This is the fifth month straight that card spending has increased, he said.

"Most of this extra spending was on durables and consumables. Fuel was the only industry where there was a notable fall in spending."

The durables industry, which includes furniture, hardware, and appliance retailing, increased by $15 million (1.4 per cent).

The consumables industry, including food and liquor retailing, rose by $9 million (0.6 per cent).

New Zealanders spent $10 million less on fuel, which was a 1.5 per cent decline.

Core retail, which excludes the motor vehicle-related industries, increased by 0.7 per cent in the month.

Cardno said the rate of increase for the value of transactions in the total, retail, and core retail series have all strengthened in recent months.

There were a total of 101 million transactions last month, with an average value of $54.

The total amount spent across all transactions was $5.4 billion.

ASB economist Christina Leung said the continued increase in consumables last month was likely to reflect the net migration inflows being seen in recent months.

"Population growth tends to boost spending in the core retail categories, particularly consumables," she said.

The increase in house sales over the past year was underpinning a recovery in the durables sector, Leung said. Households tend to buy appliances and furniture to furnish their new houses.

Kiwis were still being cautious in some areas though, with discretionary spending on eating out and clothing again easing in February, she added.

"Consumer confidence has recovered over the past year, underpinned by stronger housing market activity.

"Recent business surveys also suggest retailers are more optimistic about demand.

"Nonetheless, the continued high level of household debt and weakness in the labour market should constrain the extent to which consumer spending recovers."

Paymark, which processes about three quarters of the country's electronic transactions, said last week that spending through its network rose by 0.9 per cent from January to February.

The total value of electronic transactions through its network was $3.79 billion and the highest growth came from Canterbury (+4.6 per cent), Otago (+4 per cent) and South Canterbury (+3.4 per cent).

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